Content Delivery Network (CDN) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The content delivery network (CDN) market was valued at USD 11.76 billion in 2020 and is expected to reach a value of USD 49.61 billion by 2026, at a CAGR of 27.30%, over the forecast period. Growing demand for rich video content, increasing online users, and digitization trends in organizations across the end-user verticals boost the overall CDN market demand.

• A CDN is an online network of connected computers that distributes web content quickly to many users by copying or caching the content on various servers and sending it to consumers remotely. High availability and high-performance content delivery to end users are achieved through the use of CDN. Web objects (text, graphics, and scripts), downloadable objects (media files, software, documents), applications (eCommerce, portals), real-time streaming data, on-demand streaming media, and social networks all make use of CDNs nowadays.
• Over-the-top (OTT) video consumption is quickly evolving due to continual digital infrastructure improvements and initiatives OTT platforms take to produce engaging content for customers at reasonable costs while providing significant value. Additionally, consumption is being boosted by the rising use of mobile devices, the appeal of big screens, and investments in creating original content. Demand for CDN solutions is rising as OTT and VoD consumers grow in number. According to Cisco’s visual networking index, IP video is projected to have 79% of the online traffic by 2024. This suggests the growing trend of online video services.
• The popularity of online gaming is skyrocketing as new technologies like 4K, and Ultra HD become available, which drives the market. Gaming companies are increasingly investing in CDN to deliver high-quality content to ensure a better user experience. CDN provides gaming firms to provide essential files and patches to players to download quickly. Additionally, server crashes and download failures are also avoided. All of these features enhance the pre-gaming process. Furthermore, CDN offers scalability, allowing players to keep playing even if the game's download size increases due to its high-quality visuals and other capabilities.
• With an increase in usage of the internet and smart devices, an enormous amount of data is being generated daily, which needs to be smartly managed. Web-performance optimization solutions are aimed at reducing latency. The success of these solutions will increase the demand from major retailers and the media and entertainment industry.
• Companies are facing challenges due to bandwidth and network allotment, particularly in rural areas. The company needs to attract enough clients to pay its annual running costs, which include debt payments, replacement capital on a regular basis, and operating expenses. Debt payments rank among the most difficult expenses to cover in rural areas. However, in recent years, a significant growth has been observed in rural areas due to rising rural networks from 60% to over 90%. Considering penetration rates that vary widely because of demographics (incomes, ages, and the proportion of seasonal residents) and the amount of grant support companies are targeting developing and underdeveloped regions.
• COVID-19 has had a direct impact on the market since the vendors of content delivery networks rely on several economic elements for their revenue, including vibrant financial markets, the movement of liquidity, and financing from financial institutions. Despite these obstacles, the CDN market is anticipated to expand steadily throughout the forecast period due to the rising data exchange rates on the internet and the ongoing deployment of high-speed networks.

Scope of the Report

Content delivery networks (CDNs) are built on top of the public internet to accelerate website performance, leverage high-layer network intelligence, and efficiently manage data delivery. CDN providers are the organizations that are devoted to hosting the content of the third-party content providers on their servers. 

The scope of the study focuses on the market analysis of content delivery networks sold worldwide, and market sizing encompasses the revenue generated through plastic packaging sold by various market players. The study also tracks the key market parameters, underlying growth influencers, and major vendors operating in the industry, which supports the market estimations and growth rates over the forecast period. The study further analyzes the overall impact of COVID-19 on the ecosystem. The report's scope encompasses market sizing and forecast for segmentation by solution and service, end user, and geography.

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Key Market Trends

Media Delivery is Expected to Have a Significant Market Share

• The world population using the internet stands at 56.3%, which is responsible for the growing online content. The advent of 4K/UHD televisions, high-definition content supporting smart gadgets, and improving connectivity raise viewers' expectations for high-quality content.
• Many media organizations are making a transition toward a digital distribution model. This distribution model avoids buffering and stream crashes by putting copies of media files close to viewers. This caching functionality makes a significant difference, even for live broadcasts. Additionally, it reduces the load on the origin server resulting in a more reliable experience. These transitions present a great market opportunity for CDN vendors.
• CDN vendors are increasingly focusing on techniques for web performance optimization to cater to mobile and dynamic content requirements. For instance, in April 2022, Google launched Media CDN to compete in web and API acceleration content delivery.
• According to the Global Internet Phenomena Report, streaming video accounted for 53.7% of internet bandwidth traffic, up by 4.8% from a year ago. Companies that sell access to content delivery networks (CDNs), which are collections of servers made to accelerate the transmission of web material, gained greatly. The data volume of CDN is increasing due to the advent of peer-to-peer technology (p2p), 5G, wearable devices, IoT, virtual reality, augmented reality, and advancing technological innovation.
• Mobile traffic for media-related services accounted for about 45%, which is expected to increase. The need for content to be mobile-compatible is expected to increase, owing to the expected growth of consumed data to about 4.5 GB per month, which is currently at 1.5 GB on average. Media CDN is built with AI/ML, giving viewers more control over how they see, experience, and interact with content. For example, sports fans watching a game can obtain real-time stats and analytics, viewers can purchase items from virtual billboards, etc.

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