CES: Cablevision Cuts CDN Deal With Netflix

Internet Video Streamer Provides 'Super HD' and 3DTV Content to MSO and Other ISP Partners

Las Vegas -- Cablevision Systems announced a deal with Netflix to pipe Internet video directly into the MSO’s network, which will let the operator’s subscribers access high-bandwidth content including “Super HD” and 3DTV content from Netflix.

Cablevision is participating in Netflix’s Open Connect private content delivery network, which it launched last year.

“Optimum is committed to providing the highest-quality TV, phone and Internet to our customers, and our new partnership with Netflix supports this critical objective,” Cablevision president and CEO James Dolan said in a statement. “With Open Connect, we are establishing a direct local connection with Netflix that delivers a higher-quality Netflix viewing experience for Optimum customers than Verizon or AT&T can provide, including access to new Netflix Super HD and 3D TV shows and movies.”

Financial terms of the agreement between Cablevision and Netflix were not disclosed. According to Netflix, Internet service providers can participate in Open Connect at no cost.

The relationship between Netflix and cable operators with respect to bandwidth management – and Comcast in particular -- has been contentious. Netflix has complained that bandwidth caps and usage-based pricing threaten the future of Internet video. Last year CEO Reed Hastings argued that Comcast’s policy of exempting VOD content delivered to its own Xfinity app on Xbox from bandwidth-usage allowances violated Internet network neutrality principles.

According to Netflix, Open Connect now delivers the majority of Netflix international traffic and is growing at a "rapid pace" in the U.S. market. With the direct connection to Netflix’s CDN, as opposed to relying on third-party CDNs or the public Internet, ISPs can more effectively manage their networks and more efficiently deliver Internet services to consumers, according to Netflix. The private CDN also saves Netflix money it pays to CDN providers such as Level 3 Communications.

Netflix Open Connect is now widely deployed around the world, serving the vast majority of Netflix video in Europe, Canada and Latin America, and a growing proportion in the U.S., where Netflix has over 25 million streaming members.

In addition to Cablevision, other ISPs participating in the Netflix Open Connect CDN include Virgin Media, British Telecom, Telmex and Telus.

“Our goal is to have all of our members served by Open Connect as soon as possible,” Hastings said in a statement.

With the private CDN, Netflix is delivering select titles in “Super HD,” the highest quality video format offered by Netflix, which provides better picture quality on 1080p HDTVs, according to the company. Netflix Super HD, which requires a minimum 5 Megabit per second connection, initially will be available on Sony's PlayStation3, Nintendo Wii U, Windows 8, Roku, Apple TVs with 1080p, and select smart TVs and Blu-Ray players.

In addition, in the U.S., Netflix is also for the first time offering a small number of titles streaming in 3D through Open Connect partners.

Titles available in 3D viewing include action fantasy drama Immortals, Red Bull Media House's snowboarding documentary The Art of Flight, and several titles from 3net Studios, the joint venture of Discovery Communications, Sony and Imax, including native 3D series African Wild, Scary Tales and Live Fire.

“These new Super HD and 3D formats are more challenging to deliver than our other video streams, which is why we will deliver them through Open Connect,” Ken Florance, vice president of content delivery at Netflix, said in a statement. “Any ISP that wants to be able to deliver our new formats can do so easily and for free.”

Netflix members can verify if their ISP is part of the Open Connect CDN program -- and provides access to Netflix Super HD and, in the U.S. only, 3D -- via www.netflix.com/superhd.