Level 3 to be a primary Netflix CDN provider

A DVD rental from Netflix is seen in Medford, in this Massachusetts July 25, 2008 file photo. REUTERS/Brian Snyder

Bangalore (Reuters) - Level 3 Communications Inc said it will become a primary content delivery network (CDN) provider for Netflix Inc, starting from the new year.

Level 3 shares shot up 10 percent before the bell.

On November 9, Reuters quoted sources saying that Akamai Technologies Inc was at risk of losing its status as Netflix’s primary CDN provider.

In addition to supporting Netflix for streaming movies and TV shows, Level 3 will store the entire Netflix streaming library of more than 20,000 titles, it said in a statement.

Level 3 said its has accelerated plans to further invest in its CDN capacity and will double its storage capacity.

Akamai, Level 3 and Limelight offer content delivery services to media clients by navigating less congested routes over the Web. Demand for their services have been increasing due to the popularity of live streaming of events and movie downloads, particularly in high definition.

Shares of Level 3 rose 10 percent to $1.13 in pre-market trading on Thursday. Akamai shares fell 4 percent while rival Limelight’s stock fell 5 percent.

Reporting by Supantha Mukherjee in Bangalore; Editing by Gopakumar Warrier, editing by Gerald E. McCormick