Level 3 Gets Netflix Streaming Contract

11 Nov, 2010 By: Erik Gruenwedel

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Level 3 Communications Inc. Nov. 11 said it has been selected by Netflix to be the online DVD rental pioneer’s primary streaming services provider.

“We’ve been impressed with [Level 3’s] speed and consistency, and we feel confident in their ability to quickly scale to meet demand as more and more Netflix members watch instantly,” said Andrew Rendich, chief service and DVD operations officer with Netflix.

The announcement tended to support speculation Netflix was shopping for a new primary provider to replace or supplement longtime backend supporter Akamai Technologies Inc.

However, Akamai said it would continue to provide streaming services for Netflix’s increasingly streaming-oriented subscriber base, which is projected to top 19 million by the end of the year.

Netflix spokesperson Steve Swasey confirmed Akamai would continue providing streaming services.

“We don't disclose the level of involvement by vendors,” Swasey said.

Through December, Los Gatos, Calif.-based Netflix will move its 20,000-title digital library to Broomfield, Colo.-based Level 3 in preparation for serving traffic beginning Jan. 1, 2011.

As a result of the deal, Level 3 will double its storage capacity and add 2.9 Terabits per second (Tbps) of globally available CDN capacity, which is in addition to the 1.65 Tbps that was deployed in the third quarter of this year.

The company reported a net loss of $163 million during its most recent fiscal period.

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