How Netflix Engineers Seamless Streaming with Cloud‑Based Encoding and CDN

Netflix's Content Delivery Architecture

Netflix remains the dominant streaming platform with over 50,000 titles and more than 200 million subscribers in over 180 countries. Its 2022 Q3 report showed $7.926 billion revenue, a 5.9% YoY increase, and 2.41 million net new users.

This article series goes beyond the surface of Netflix’s operations to explore the end‑to‑end technical processes that enable massive content delivery.

Encoding and Transcoding

Raw movies from studios are extremely large (a 2‑hour Blu‑ray can be 15‑25 GB). Delivering such files directly would waste bandwidth. Netflix therefore receives the original video, then performs a series of preprocessing steps—encoding to compress video and audio for specific devices, and transcoding to convert the encoded files into additional formats such as MP4, MOV, or MPEG‑4.

Reduce file size

Decrease streaming buffer time

Change resolution or aspect ratio

Alter audio format or quality

Convert legacy files to modern formats

Create device‑specific video versions (PC, tablet, smartphone, TV, older devices)

Create videos compatible with particular software or services

For example, compressing a 25 GB movie is time‑consuming, so Netflix splits the source video into many smaller chunks and runs parallel encoding/transcoding jobs on AWS EC2 instances, producing multiple resolutions (4K, 1080p, 720p, 360p) and formats.

Each chunk is replicated roughly 1,300 times to serve users with different network speeds.

Storage on Amazon S3

Processed video chunks are stored in Amazon S3, a highly scalable object‑storage service. All of Netflix’s compute and storage needs—including databases, analytics, recommendation engines, and video transcoding—run on AWS, totaling over 100,000 server instances.

Adaptive Bitrate Streaming

Typical video chunks are about 10 seconds long. When a user presses play, the Netflix Playback API fetches the appropriate chunk. The client keeps one chunk playing, pre‑loads the next, and downloads a further chunk in advance. The arrival speed of each chunk determines the bitrate for subsequent chunks; if a chunk arrives quickly, the client switches to a higher‑resolution version, otherwise it falls back to a lower bitrate, explaining the occasional grainy‑to‑clear resolution shifts during playback.

Open Connect CDN

To reduce latency and bandwidth costs, Netflix built its own global content‑delivery network called Open Connect. Small Open Connect Appliances (OCAs) are deployed inside ISPs and Internet Exchange Points (IXPs) worldwide, each capable of storing up to 280 TB of video data.

After videos are compressed and stored in S3, they are transferred during off‑peak hours to these OCA boxes. When a user requests a video, the request is served from the nearest OCA rather than from a US‑based Netflix server, delivering faster playback and a better user experience.

Open Connect also replicates content between OCAs within the same site using application‑layer copying, ensuring redundancy and efficient distribution.

Key Takeaways

Netflix compresses and transcodes raw video files.

Transcoded files are split into parallel processing jobs on AWS.

Each chunk is produced in multiple resolutions to match varying bandwidth.

All chunks are stored in Amazon S3.

During off‑peak periods, chunks are transferred to Open Connect CDN boxes worldwide.

Open Connect appliances cache and share content, providing low‑latency delivery.

The next article in this series will dive into Netflix’s backend core architecture.