We present an architecture of a VOD system employing proxy servers. The proposed VOD system provides efficient and reliable VOD services and solves the problems caused by traditional VOD systems of centralized, hierarchical or distributed architecture. The proxy servers are placed between video servers and user systems. The proxy server is a small size video server that has not only caching function but also intelligence such as VCR-like video stream control or navigation of other proxy/video servers to search for a selected video program. Using a VOD system of the proposed architecture, the VOD services can be provided to more users because it reduces the workload of video servers and network traffic. We provide the performance model of the system. Service availability is also analyzed. The proposed architecture shows better performance and availability than the traditional VOD architectures.