The Web Has Become the Netflix Channel

Netflix has become the dominant Web application in the States, replacing browsers, and threatens to do the same in Canada, where it’s in 8% of households after only seven months on the market. It’s no wonder that broadband service providers want a piece of its skin — or its subscribers’ skin.

Netflix is now the largest source of Internet traffic in North America, according to a report from Sandvine, and it accounts for 29.7% of peak downstream traffic.

It also said that real-time entertainment applications such as Netflix consume 49.2% of peak aggregate traffic in North America, up from 29.5% in 2009 – a 60% increase. It predicts that the category will account for 55% to 60% of peak aggregate traffic by the end of this year.

We have been warning that the proliferation of smart TVs, Blu-ray players, gaming consoles and smart-TV adapters, every one of which comes with the Netflix app and an offer for a free monthly trial, would increase OTT traffic substantially. How can a media lover resist the allure of the free trial and then the $8 a month beckoning call?

Web browsing has dropped to second in Internet traffic in the States. It accounts for 16.6% now, down from 38.7% in 2009.

Real-time entertainment apps are not as popular outside the States and Canada, mainly because Netflix is not available outside those countries. Yet.

In Latin America, social networking, mostly Facebook, is a bigger source of traffic than YouTube, with 14% of network traffic. Real-time entertainment accounts for 27.5% of peak aggregate traffic. There are rumors, based on Netflix acquiring Spanish language content, that it will next open countries in Latin America before it does Europe. We doubt that because of the paucity of wireline broadband there.

The European market looks riper. Real-time entertainment is up to 33.2% of peak aggregate traffic, although that’s only a slight increase from its 31.9% last fall. The P2P file-sharing method BitTorrent is the largest single user of upstream, at 59.7%, and downstream, at 21.6%.

Surprisingly the BBC’s iPlayer accounts for only 6.6% of peak downstream traffic in the UK. Perhaps there’s an opening there for Netflix or another online subscription service.

Sandvine said the study is based on voluntary and anonymous data from over 220 fixed and mobile service provider networks in Europe, South America and North America.

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