Netflix and technology: How the streaming giant has found its way to online domination

Online streaming has changed entertainment forever, and the global streaming market has grown exponentially as a result. There are many types of streaming, from live sports to music, but video-on-demand (VoD) streaming applications like Netflix remain one of the most popular. In the third quarter of 2021, Netflix, through releases like Squid Game, saw a 16% year-over-year increase in revenue. At the end of Q3 2021, the platform had 214 million paid members – higher than Wall Street’s expectations of 212.7 million – which was growth achieved through popular features like content discovery, selection experience and recommendation algorithms. Yet, despite Netflix’s popularity, few understand the nature of what it takes to give consumers smooth access to popular titles from any Internet-connected device. 

The Netflix business model

When Netflix released Squid Game there was no predicting that 111 million users would watch the show in its first 28 days. The global reaction was staggering, and one might have assumed, with those figures, there would have been lag times due to increased traffic. However, this was not the case because of a cloud computing decision Netflix made in 2011. In the early 2010s, the media company decided to produce greater efficiency for content delivery. Previously, it had relied 100% on Amazon’s cloud computing service, which, unknown to many, is responsible for many of Netflix’s beloved features, such as selection experience. This decision led to Netflix Open Connect, which is the platform’s own content delivery network (CDN). The globally distributed CDN is one of the highest volume networks in the world, and roughly 90% of its traffic is delivered through direct connections between Open Connect and the residential ISPs its members use.

Essentially, it’s because of Open Connect that millions of people can watch Netflix shows simultaneously, and there isn’t additional traffic on the Internet. This ease of access is something users take for granted, but managing the network requires a lot of work. For example, in Australia, access to externally produced content comes through undersea cables. Instead of using this undersea capacity to serve the company’s traffic, Netflix copies files from its US-based transcoding repository to Australia-based storage locations. Once each file is in Australia, it is replicated to Open Connect services within each ISP network.

The bigger picture

Netflix’s Open Connect network is a complex technology that requires a lot of monitoring to perform well. For instance, what happens if one of the files fails to copy from the transcoding repository and the error isn’t caught? However, it’s also a great reminder of how networks are the backbone of every business. Today, both large-cap companies and non-profits use networks to conduct business or monitor their consumer infrastructure proactively, which is essential, as companies want to prevent business-impacting issues from happening, such as a file failing to copy.

Network performance is managed by various tools, which give companies access to alert systems and dashboards, promoting visibility when managing their devices. Additionally, some network monitoring tools specialise in certain aspects and offer unique features. For example, a network monitoring software that specialises in ensuring quality of experience (QoE), such as Solar Wind’s NMS, will also have customisable metrics and features in addition to built-in default settings. This diversity promotes optimal network alerting and reports. Network performance is essential in any business, and Netflix’s Open Connect network highlights how many industries are using various types of the technology to either conduct business or monitor it. 

There is a lot that goes on behind the scenes in online streaming. Many don’t know that the features that make online streaming so attractive come from various technologies such as cloud computing and content delivery networks. Netflix is an excellent example of this, and for the continued use of network monitoring in business.

The editorial unit