CONTENT DELIVERY NETWORK MARKET ANALYSIS

Market Challenges And Opportunities

Market Dynamics- Drivers

1. Growing consumption of online video content is expected to drive growth of the global content delivery network (CDN) market during the forecast period

The daily consumption of videos is rapidly shifting from cable and DTH to internet-based delivery platforms. As a result of this, many market players are focused on capitalizing on these opportunities by providing novel services. This, in turn, is expected to increase traffic over the Internet and place additional pressure on organizations and OTT service providers, in order to ensure optimal quality to provide an enhanced user experience. Furthermore, top-tier content providers such as HBO and CBS are offering content services directly to consumers. Thus, these factors are expected to drive growth of the global content delivery network (CDN) market during the forecast period.

2. Retention of online customers is expected to propel the global content delivery network (CDN) market over the forecast period

Various SMEs in emerging markets are focused on using the digital platform and internet to gain a global presence. On the contrary, large organizations are laying emphasis on the engaging and interactive digital experience that typically depends upon heavy multimedia content. This in turn can lead to increasing loading time of webpages due to increasing traffic and congestion on the Internet. Engaging customers is vital for sustaining the business and is becoming increasingly challenging with rapidly expanding online economic conditions characterized by intense competition. Therefore, these factors are expected to propel the global content delivery network (CDN) market growth over the forecast period.

Market Dynamics- Restraint

1. Shift of key players to in-house CDN infrastructure is expected to hinder the global content delivery network (CDN) market growth over the forecast period

Certain key customers are shifting their focuses from relying on third-party CDN services to deploying their own CDN that is tailored to their specific demands. This is mainly due to increasing inclination towards providing superior user experience to their ever-increasing subscriber base. For instance, in June 2012, Netflix announced the rollout of Open Connect—its in-house CDN—in order to provide optimal service to its growing customer base. In May 2014, Comcast announced the deployment of CDN in order to move some traffic from third-party CDN services into its own. The company also launched commercial CDN services primarily targeting medium and large content owners.

2. Challenges associated with network connectivity in live video streaming are expected to restrain growth of the global content delivery network (CDN) market during the forecast period

Despite its rising popularity, CDN faces numerous challenges, especially poor network connectivity. High end content such as live video streaming requires high bandwidth and high-speed internet for seamless streaming. There is poor network connectivity in emerging economies such as Brazil and MEA. Therefore, these factors are expected to restrain growth of the global content delivery network market during the forecast period.

Market Opportunity

1. Rising IP traffic can present lucrative growth opportunities in the global content delivery network (CDN) market

Increasing IP traffic across the globe is expected to increase load on the present Internet network. This in turn is anticipated to significantly drive demand for CDN. According to Coherent Market Insights’ analysis, Global IP traffic is anticipated to reach 2 zettabytes per year (168 exabytes per month) by 2019. In 2014, 39% of all Internet traffic passed through CDN, which is expected to increase to 62% by 2019. Furthermore, in 2014, the global internet traffic reached 15.5 GB per capita and is anticipated to account for 37 GB per capita by 2019 end.

2. Strengthening the broadband structure can provide major business opportunities in the global content delivery network (CDN) market

Rapid improvements in the broadband infrastructure worldwide in turn translates to significantly improved broadband speed. This along with increasing internet penetration and affordability of these services is expected to increase the consumption of rich media content via various devices. This, in turn, is expected to boost the adoption of CDN in order to cater to such demands.