Los Angeles Business Journal

Netflix Taps Server Maker For Role in Film Business

INTERNET: Project with Equus to ease delivery of movies to customers. By Adam Popescu Monday, July 9, 2012
Equus worker with servers at the company’s City of Industry facility.

Equus worker with servers at the company’s City of Industry facility. Photo by Ringo Chiu.

Inside the plant, a fiber cable runs directly from the street to the factory floor and into the servers. It’s a direct link between Netflix and the machines storing its content, so Netflix controls what media winds up on its servers.

“That was part of the reason we moved there, to get the fiber uplink,” Pollock said.

Robert Kleinhenz, chief economist at the Los Angeles County Economic Development Corp., said the fiber cabling makes the Industry move valuable as Netflix expands.

“It positions that company to grow as the market grows going forward for several years to come, as opposed to hitting upper bounds of capacity through other delivery means,” Kleinhenz said.

Equus builds computer hardware for resellers and independent software vendors. It was founded in 1989 and has about 200 employees. Intequus, the cloud computing division of Equus, provides the new hardware design for Netflix.

Content delivery

The need for the servers has been driven by Netflix’s growth. The company’s subscribers increased from about 5.6 million in 2006 to 20 million in 2011. Streaming video has been growing dramatically, too: In 2009, Netflix subscribers downloaded 10.6 million movies; by 2011, that rose to 23.6 million.

A Netflix representative declined to comment for this article.

Alex Dudley, vice president of public relations for Time Warner Cable, said the move gives Netflix a better connection to its network.

Dudley said companies such as Time Warner Cable aren’t worried about how they get content and neither are customers. There won’t be any difference in picture quality.

“I think they’re factoring that the best way to enjoy Netflix is with a broadband connection,” Dudley said.

Stephen Condon, vice president of marketing for Tempe, Ariz.’s Limelight Networks Inc., one of the companies Netflix has been using to stream its content, said it’s not uncommon for high-traffic websites to use content delivery networks such as the servers Equus is making for Netflix.

“It’s not new technology that they’re deploying,” Condon said. “It’s a service for Netflix to work directly with the ISP to have this content delivered.”

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