Netflix is launching its own network

• Tweet

Americans watch a lot of movies and a lot of television. And these days, they probably get their fix on Netflix--to the tune of nearly a billion hours a month.

The online rental giant, which last week topped iTunes to become the largest online movie service (by revenue), has seen an explosion in use of its streaming video service, Netflix Instant. It's responding to skyrocketing demand by launching the Open Connect Network, to help internet service providers manage heavy content flow across networks.

Netflix says it owns about 30 percent of peak U.S. traffic on ISP networks. ISPs will be able to directly access Netflix video through Open Connect: in fact, approximately 5 percent of Netflix content is already streamed through the new network.

According to an announcement posted Monday by the company's vice president of content delivery, Ken Florance, the video streaming service will phase out of its current model using commercial content delivery networks, eventually flipping it's traffic to its new network. Florance points out that YouTube, the Internet's top video content site, has long used a proprietary content delivery network.