Netflix now accounts for 13.5 per cent of downstream traffic: Sandvine

Following Netflix Inc.'s launch in Canada last fall, the service's 800,000 Canadian users now amount to 10 per cent of broadband households nationally and 13.5 per cent of peak downstream traffic in Canada, Sandvine Inc. reported in a new study Tuesday. “The quick and widespread adoption is due in part to the fact Netflix has been aggressive about investing in content and services that are important to Canadians,” the report states. Sandvine suggested other countries should take heed of Netflix's quick adoption in Canada to see what to expect if the service continues to expand to other jurisdictions. The Sandvine report also said Netflix now represents North America’s largest source of Internet traffic, accounting for almost 30 per cent of peak downstream traffic. The company, which makes equipment to help Internet service providers understand and manage network traffic, published the findings in its Global Internet Phenomena Report: Spring 2011. From streaming movies to live events like the popular U.S. college basketball tournament March Madness or the Royal wedding, Sandvine Inc.’s report said that quality networks are necessary for the increased use of data-heavy, on-demand applications. “I think that everyone’s going to have to accommodate for the fact that people have expressed that they want to watch video over the Internet,” Sandvine president and CEO Dave Caputo told BNN in an interview Tuesday. “It’s up to the content providers, who are ultimately the king here, to decide how they can monetize that.” Netflix accounts for 29.7 per cent of peak downstream traffic in North America, with real-time entertainment applications as a whole making up 49.2 per cent of aggregate peak traffic, Sandvine said. The latter grew from just 29.5 per cent in 2009, representing a 60 per cent increase. If the current growth rate is maintained, real-time entertainment traffic would represent 55 to 60 per cent of traffic by year’s end. The report added that while Netflix generated $12 million in revenue in Canada last quarter, it lost $11 million due to spending on content, including a rights deal with the CBC. In Europe, real-time entertainment took a more modest climb to 33.2 per cent of peak aggregate traffic, while peer-to-peer file sharing program BitTorrent remained the largest component of both upstream (59.7 per cent) and downstream (21.6 per cent) peak-period traffic, Sandvine said. The report also noted that individual subscribers in Europe consume twice the amount of data as North Americans. In Latin America, real-time entertainment represents 27.5 per cent of peak aggregate traffic. Sandvine relied on data from providers in North and South America and Europe. Caputo told BNN that more intelligent solutions to managing Internet traffic are needed. While most people don’t care about a one-second delay in receiving an email, he said, they care about the quality of an online voice service. Caputo said live streaming of events represents the third evolutionary phase of watching video online, after peer-to-peer (p2p) applications to downloading content and streaming. The report notes that p2p file sharing’s share of traffic barely dropped with the rise of real-time content, suggesting that the application is here to stay. Despite the popularity of p2p, the amount of data downloaded in North America is now higher on Netflix than it is on BitTorrent. “Peer-to-peer file sharing is still huge on a volume basis but the growth of real-time streaming, real-time entertainment has just blown by it,” Caputo told BNN. news@thewirereport.ca

Netflix now accounts for 13.5 per cent of downstream traffic: Sandvine

Broadcast | May 17, 2011

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