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Netflix Moves Into the Cloud With Amazon Web Services

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Netflix (s NFLX) is expanding its use of cloud infrastructure, moving some of its customer-facing and back-end operations onto Amazon (s AMZN) Web Services (AWS). After using AWS for more than a year, a number of the most visible portions of its website — including member movie lists, Netflix search and the site’s recommendation engine — now leverage Amazon’s cloud infrastructure to make them work.

Perhaps more importantly, Netflix is using Amazon’s Elastic Compute Cloud (EC2) and Simple Storage Service (S3) for the transcoding and storage of its growing library of streaming video content. Netflix now has more than 17,000 titles on its Watch Instantly online video service, and has been rapidly increasing both the amount of content that is available, as well as the number of consumer electronics devices on which those videos can be watched.

Netflix has been making deals with Hollywood studios like Warner Bros. (s TWX), 20th Century Fox (s NWS) and Universal Studios that have helped it add more movies and TV shows to the streaming service, in exchange for a 28-day window before it makes new releases available as part of its DVD-by-mail program. While users may have to wait a little bit longer for their DVDs, the addition of new content is driving more adoption for the Watch Instantly service, as 55 percent of Netflix subscribers streamed videos in the first quarter of 2010, compared to just 36 percent a year earlier.

The growing number of consumer electronics devices through which subscribers can access the streaming service is also helping to drive adoption. Netflix expects to have it available on more than 100 different consumer electronics devices by the end of the year, including all three major gaming consoles, the Apple (s aapl) iPad, TiVo (s tivo) DVRs, Roku broadband set-top boxes and a number of Blu-ray players and HD TVs from CE manufacturers like LG, Samsung, Sony (S sne) and Vizio. Each of those devices requires a different encoding and file format, which means that for each new device or each new piece of content, Netflix will rely on Amazon to transcode and store the vast — and growing — amount of digital files needed.

Related content on GigaOM Pro: From Spots to Spikes: TV Taps Into the Cloud (subscription required)

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11 Responses to “Netflix Moves Into the Cloud With Amazon Web Services”

  1. Jack Gunt

    @David -having used both services, AWS is pretty much the main game in town at this point. Rackspace is good, but the scale and self-service capabilities you need are unparalleled at AWS. They are getting services out at a rapid pace, and their systems are battle tested to a large extent.

    @Dave – good observation. There are several other vendors who are also moving to the cloud for steady loads. Recently, Lawson and Pegasystems – 2 public ISVs also announced flagship offerings on AWS.

    Get ready for a whole lot more!

  2. I believe GigaOM and others posted articles to the effect that public cloud computing is justified when the IT workload significantly fluctuates or rapidly grows. Once stable, organizations save more by keeping the workload in their own centers as a private cloud or conventional consolidated servers.

    Netflix’s decision would seem to contradict this recommendation.

    The article mentions Netflix’s streaming growth, but not other applications. The article would be much more interesting if Netflix’s rationale for moving to a public cloud was described.