Unlocking the Future of Media Delivery: How the Edge is transforming Content Distribution Networks (CDNs)

In an era defined by digital acceleration, the content distribution networks (CDNs) underpinning many internet-powered experiences stand at a critical juncture; the CDN market is maturing, and some consolidation is taking effect. However, the relentless need for more bandwidth for content and applications delivered with lower latency and cost means the industry must embrace innovation to keep up. This ultimately extends to embracing edge, embracing standards, embracing working partnerships, and ultimately embracing the future.

The burgeoning demand for digital content has proven to outgrow the traditional CDN’s ability to evolve as a business model. The necessity for a better scale of the CDN concept has given way to the first edge use case: replacing traditional centralized content delivery at main peering point data centers with a highly distributed network across hundreds of locations deep inside ISP networks and much closer to consumers. This contrasting shift ignites improved bandwidth efficiency, reduced latency, and delivers a better consumer experience across all QoE metrics.

CDN transformation is therefore critical as the sheer volume of data moving across the web is staggering; the best guess from TeleGeography, a telecommunications market research firm, suggests that international bandwidth demand almost doubled between 2020 and 2022 to reach 3.8 Pbps.

The Present State of Digital Consumption

As the global appetite for digital content grows and diversifies across regions in every corner of the world, developing markets are emerging as hotbeds for digital consumption. In Asia, the OTT (over-the-top) video market is projected to surpass US$73 Billion By 2027, according to Media Partners Asia, with countries like India and Indonesia leading the charge due to their massive populations and improving digital infrastructure. Africa, though at an earlier stage, is witnessing a rapid rise in streaming services, with the number of SVOD (subscription video on demand) subscriptions expected to reach 18 million by 2029, according to Digital TV Research.

As broadband speeds and connected device penetration continue to rise, mature markets are embracing an increasingly diverse range of video consumption models to meet the demand for richer, more immersive video experiences. Consumers in regions like the United States and Europe are shifting towards higher-quality, data-intensive formats such as 4K streaming, interactive metaverse platforms, and 360-degree videos. Streaming subscriptions per household in the U.S. reached 3.5 in April 2023, according to Omdia, demonstrating sustained interest in premium content. While some households may opt for more affordable options, such as free ad-supported streaming television (FAST) platforms, the overall appetite for video content remains robust.

Content Distribution Trends

With SVOD, FAST, and hybrid models competing for market share, content publishers are now riding an era marked by a proliferation of choice. Creating a profitable business model in an increasingly globalized market is akin to finding a path through a labyrinth. Taken together, these factors mean that leveraging commercial CDNs is a strategic necessity, not merely a technical requirement, as publishers strive to deliver seamless, high-quality content to international audiences while increasing profitability. Yet even with growing demand, commoditization has impacted the CDN industry. Market movements, such as the exits of StackPath and Lumen and Edgio’s recent filing for chapter 11 bankruptcy, reflect the strategic reorientation towards core business priorities, especially in the face of financial struggles. CDNs that cannot differentiate themselves and find a path to profitability will continue to falter over the next few years.

Legacy CDNs: Falling Short of True Edge Capabilities

A key part of the differentiation is the edge when it’s underpinned by compelling performance data that proves the value offered to content publishers. The rationale is clear: delivering content from an ISP-embedded edge location closer to the consumer enhances efficiency and user experience. However, the landscape is cluttered with legacy CDNs masquerading as edge networks without truly offering the benefits of edge computing. This blurs the lines between genuine edge delivery and rebranded traditional models. These traditional CDNs may move content delivery closer to regional hubs, but they still rely on centralized infrastructure that lacks the speed and efficiency of true edge networks. This partial shift fails to unlock the full potential of edge technology, leaving content publishers with incremental improvements rather than transformative results.

In contrast, genuine edge CDNs, like Qwilt’s model, embed their infrastructure deep within ISP networks, delivering content much closer to consumers. This proximity reduces latency, eliminates unnecessary traffic bottlenecks, and optimizes bandwidth usage for a more efficient and seamless user experience. Unlike rebranded CDNs, which still route traffic through intermediary networks, true edge networks offer faster, more reliable content delivery that can scale to meet the growing demands of digital consumption.

Recognizing the distinction between these two models is crucial for content publishers looking to future-proof their delivery strategy. With the edge poised to support emerging technologies like AI-powered apps and real-time data processing, only true edge networks can deliver the performance gains needed for the next generation of digital experiences.

At present, the main edge use case is content distribution, but looking forward, the same infrastructure located within ISP data centers, local exchanges, and ultimately, roadside cabinets and cell sites, will serve as the vital infrastructure for emerging edge use cases over the next decade. The shift towards edge computing is not just a technological upgrade; it’s a strategic pivot essential for navigating the future of content distribution.

Federated is the Future

With the need to deploy applications at a massive scale with optimum efficiency being paramount, a key concept to consider is the notion of the federated edge. Applications that require low latency, such as AI-powered support systems or real-time data processing, can be deployed across multiple operator networks, leveraging local compute and storage resources while adhering to local data privacy or AI-specific governance laws. The federated model can also offer scalability, with common API standards and billing frameworks allowing service providers to adjust their capacity almost on-demand.

A global open edge cloud already exists, and it’s outperforming traditional CDNs. Qwilt’s open, federated approach has evolved the CDN model to one that enables content and application providers to universally access and perform their compute or delivery from inside the very edge of ISPs united around the globe. Qwilt’s edge CDN model serves content from origin servers deep within operator networks. By eliminating redundant data streams and reducing the distance content travels, Qwilt’s model offers a glimpse into the efficiency and effectiveness of the open edge approach. By leveraging partnerships with over 180 service providers to build the world’s largest edge cloud that is approaching 2bn connected subscribers, Qwilt and the ecosystem of service provider partners offer daily proof of the viability of this federated CDN approach.

This model, rooted in nearly a decade of industry collaboration and the adoption of Open Caching specifications by the Streaming Video Technology Alliance (SVTA), highlights a path forward that sharply contrasts with the traditional CDN model’s challenge. And this Edge CDN use case is a proven example of the power of the open edge cloud and the array of other edge compute cases that are possible.