Abstract-In an on-demand video system, the video repository generally has limited streaming capacities and may be far from the users. In order to achieve higher user capacity and lower network transmission cost, distributed servers architecture can be used, in which multiple local servers are placed close to user pools and, according to their local demands, dynamically cache the contents streamed from the repository. We study in this paper a number of caching schemes as applied in the local servers depending on whether the repository is able to multicast movie contents to the local servers or not, and whether the local servers can exchange their cached contents among themselves or not. Our caching schemes keep a circular buffer of data for the movie requested, and hence movies are partially cached. By adjusting the size of the buffer, such caching is able to achieve better tradeoff between network channels and local storage as compared to the traditional caching in which a movie is treated as an entity. For each caching scheme, we study the tradeoff between the local storage and the network channels, and address how the total cost of the system can be minimized by appropriately sizing the buffer. As compared to a number of traditional operations (request batching and multicasting, true-VOD, etc.), we show that distributed servers architecture is able to achieve much lower system cost to offer on-demand video services.Index Terms-Caching schemes, distributed servers architecture, network channels and local storage tradeoff, unicast and multicast, video-on-demand.