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Netflix to Downsize Akamai?

9 Nov, 2010 By: Erik Gruenwedel

Netflix is reportedly in negotiations with Akamai Technologies Inc. that could find the long-time backend support partner in a diminished capacity as the online DVD rental pioneer transitions further into streaming.

Online reports suggested Los Gatos, Calif.-based Netflix would split responsibility for its streaming distribution among multiple third parties, including Limelight Networks and Level 3, among others.

Media reports by Reuters and Barron’s, citing sources familiar with the discussions, said issues ranging from cost and performance were on the table.

Netflix Oct. 21 suffered a multi-hour shutdown of its website and streaming service due to yet unexplained reasons — the same day CEO Reed Hastings boasted the service had transitioned into primarily a streaming platform. Netflix promptly offered a 2% credit to affected subscribers.

Netflix spokesperson Steve Swasey denied the existence of a rift between the two companies.

“Akamai continues to be a vendor for Netflix as part of our multi-CDN provider strategy,” Swasey said. “No concerns about Akamai’s performance.”

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