Netflix Using Larger Percentage of Peak U.S. Bandwidth

28 Oct, 2011 By: Erik Gruenwedel

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Latest report from Sandvine shows that Netflix’s PR challenges on Wall Street do not translate to its subscribers’ usage habits

Finally some good news for Netflix.

Netflix accounts for 32.7% of peak downstream traffic in the United States — up 12% from the spring — underlining the streaming service as the largest Web-based service operating on a fixed access network in North America, according to a new report.

Sandvine Inc., a Waterloo, Canada networking equipment company, in its lastest “Global Internet Phenomena Report,” said Netflix’s downstream traffic (users streaming content) during peak evening hours in September topped HTTP, which accounted for 17.8% of the bandwidth, YouTube videos (at 10%) and BitTorrent file-sharing at 9%.

During the day, Netflix accounted for 23.3% of the aggregate download traffic, followed by BitTorrent at 16.5%. Surprisingly, Netflix ranked No. 3 in upstream traffic during peak hours, with 7.7% penetration, trailing HTTP at 11.4% and BitTorrent at 47.5%.

“Netflix continues to be the most powerful driver of evening traffic, and for that matter, of daily traffic overall,” the report said. “Despite some negative subscriber reaction to price hikes, Netflix has continued to increase its presence by adding 1 million U.S. subscribers since the spring 2011 report, and by many measures Netflix rules North America’s fixed access networks.”

Meanwhile, the report found that 55% of real-time entertainment traffic is destined for the television, either directly to a smart TV or via an intermediary like a game console or set-top device, a mobile device or tablet mini computer. The remaining 45% real-time entertainment traffic is delivered to desktop and laptop computers.

Consequently, many content producers, equipment vendors and communications service providers have adapted a “three screen” strategy to deliver content (such as Netflix streaming) to TVs, computers and mobile devices, according to Sandvine. Game consoles are powering this trend with CE manufacturers partnering with content producers.

“With so many Netflix-capable devices, the addressable market for the service is already enormous and will only increase, so it’s hard to envision a scenario in which absolute levels of Netflix will decline,” the report said. “However, Netflix is facing increased local competition [i.e. Amazon Prime], and as a result new services might grow at a faster rate.”

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