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  (Source: Lifehacker)
New study fuels speculations that Netflix will cause an internet meltdown

Thanks to a study just released, some sources are theorizing that Netflix, the streaming video service, could have the potential to dominate the internet and gobble up American broadband.  

Netflix currently boasts over 15 million members and according to network management company Sandvine, their 2010 Global Internet Phenomena Report indicates that Netflix accounts for 20 percent of downstream traffic during peak periods beating out YouTube, iTunes, Hulu, and p2p file-sharing.  

The spike in online streaming video users for Netflix appears to have originated from customers in Canada.  The company's traditional DVD-by-mail service was not offered as an option to consumers there, they were only provided with the choice of streaming video.  

In the week following the launch of service to Canadians, 10 percent of Netflix online usage came from that country and video streaming usage numbers will continue to increase in Canada and are expected to rise exponentially in North America overall, according to Sandvine.

In response to the study, one online report suggests that another reason that Netflix may be gaining momentum could stem from the fact that while online users spend only moments at a time on YouTube, they tend to spend hours at a time on Netflix.

Despite growing suggestions that Netflix will stretch broadband capacity to the limit during peak hours, the co-founder of Akamai -- the company that boasts 77,000 servers with hard drives and is responsible for Netflix delivery of content with local servers -- reports that no one should be concerned about a surge of streaming video crashing the internet. 

"That video is growing rapidly and going to be huge is true," said Akamai's Tom Leighton. "But there's tons of capacity out at the edges of the network....plenty of capacity in the last mile to your house."



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RE: Come on, Netflix is not alone.
By inighthawki on 11/4/2010 10:15:21 PM , Rating: 3
quote:
Honestly, what would stop them?

Perhaps people canceling their service because they can only stream 3 movies a month on their unlimited netflix plan? People don't pay a monthly fee to get access to unlimited movies if they can only watch a few before getting massive overage charges.


RE: Come on, Netflix is not alone.
By superPC on 11/5/2010 3:23:49 AM , Rating: 2
that never stop the healthcare industry. just look at what can an australian get for just 1000$ per year health insurance premiums ( www.medibank.com.au ) now that's value.

honestly if you don't have any other choice than you have to use what you got.


RE: Come on, Netflix is not alone.
By superPC on 11/5/2010 3:26:38 AM , Rating: 2
just to clarify, i hate the current healthcare bill. the only thing i like about it is the part where 80% of a healthcare insurance premium must go to claims. the other part is just complete trash.


RE: Come on, Netflix is not alone.
By ImEmmittSmith on 11/5/10, Rating: 0
RE: Come on, Netflix is not alone.
By superPC on 11/5/2010 12:19:51 PM , Rating: 3
intel profit is only 4.369 billion and have a revenue of 35.127 billion ( http://en.wikipedia.org/wiki/Intel_Corporation ). that's a profit of 11%. obviously they survived.


RE: Come on, Netflix is not alone.
By rquick on 11/7/2010 2:42:24 AM , Rating: 2
The 20% figure is not profit alone, it is for both overhead and profit. That is why the insurance experts are saying it probably can't be done and all of the smaller companies are considering closing down. But I'm sure that still seems like a good idea to you. Moron.


RE: Come on, Netflix is not alone.
By superPC on 11/5/2010 12:26:18 PM , Rating: 3
Southwest Airlines which is considered the most profitable airlines in US has a revenue of 11 billion with net income of only 178 million. that's 1.6% profit. they obviously survived. look at other industry profit margin before you complained.


RE: Come on, Netflix is not alone.
By straycat74 on 11/5/2010 1:26:40 PM , Rating: 2
http://mjperry.blogspot.com/2009/08/health-insuran...

The linked independent study says insurance companies run with a 3.3% profit margin. Lower than Medicare. Who runs Medicare?
quote:
The report also found that private plans perform those administrative functions that Medicare performs at a lower cost. Private plans are able to perform administrative functions for $12.51 per member per month compared to $13.19 per month for Medicare.


http://www.stat.columbia.edu/~cook/movabletype/arc...


RE: Come on, Netflix is not alone.
By Mint on 11/8/2010 5:06:44 AM , Rating: 2
Official "profits" don't speak much to the true finances of a company. Everyone who runs a business know that the can tack on a load of expenses that aren't true business expenses.

There's so many middlemen taking a piece of the pie. What other explanation is there for healthcare being so damn expensive in the US?

It certainly isn't the lack of tort reform, despite myth to the contrary.


By foolsgambit11 on 11/5/2010 7:40:15 PM , Rating: 2
So you're telling me that health insurance companies can't survive on 20%? That would mean that health insurance increases the cost of health care by at least 25%. The numbers I found are that, on average, 12% of revenue goes to administrative overhead among private insurers, and that includes state taxes on insurers (though I also found that numbers were at or slightly over 20% for some insurers). 12% isn't great, but considering the volume of claims they process, it's somewhat reasonable.


RE: Come on, Netflix is not alone.
By xti on 11/5/2010 9:27:55 AM , Rating: 2
you cant compare the luxury of netflix to healthcare...

if ISPs dont provide customers their netflix, then customers will move to ISPs that do. Competition will do its thing.

ive been with TWC for over a decade now, never capped, no downtime, great speeds, great pings....just saying.


RE: Come on, Netflix is not alone.
By jah1subs on 11/5/2010 9:47:24 AM , Rating: 2
I can't speak for anyone else. Where I live in the Chicago suburbs, wired broadband is a Comcast monopoly. There are $1,000,000 homes (even at today's prices) in this neighborhood. Even if it were a Comcast/AT&T duopoly, they both can/will eventually provide monthly caps, tiered pricing and all other things that are possible in a duopoly or oligopoly.

AT&T DSL exists only in theory. I am 10,000 feet straightline from the AT&T central office. I had DSL but could only get 384 kbps downstream because I am 20,000 along the AT&T wired path. I gave up the service when I lost the job for which I needed it. A month ago, after several months without broadband, I tried to go back to AT&T as the lowest cost option. They will no longer sell it to me because of location. Apparently, I am too expensive to service. By the way, I get direct mail advertising from AT&T almost every week to buy "high speed internet" from them. The only thing that I get from AT&T is angry that they are so stupid that they do not know that they cannot provide me service. Effectively, my area is "redlined."


RE: Come on, Netflix is not alone.
By FaaR on 11/5/2010 12:55:55 PM , Rating: 1
You Americans are so screwed. You live in the Chicago suburbs you say and your ISP refuses to sell you service, my friend lives about 25km from the nearest small town of about 8000 people in a rural community of a few hundred, out in a god damn forest. He gets ~6Mbit/s downstream from his ISP on a "max 8Mbit/s" type subscription.

You guys need MORE regulation, not less, because you're getting walked all over on by greedy, short-sighted corporations, and it's not exactly doing you guys any good. The rest of the world is getting better service at LOWER prices, be it cell phone access, broadband OR healthcare for that matter.

The US may be number one right now, but at this rate it's not going to last forever. Far from it.


RE: Come on, Netflix is not alone.
By straycat74 on 11/5/2010 1:05:58 PM , Rating: 2
quote:
You guys need MORE regulation

You obviously don't understand that government regulations don't allow cable companies to compete around Chicago. Lines are drawn and each company gets exclusive access to their area.


RE: Come on, Netflix is not alone.
By FaaR on 11/5/2010 1:15:12 PM , Rating: 5
Then in that case I amend my post with you obviously need better regulation. Other countries have solved this issue far better - my own by mandating that other companies must be given access to a company's physical network, thus opening up the lines for competition. There's no exclusive access.

That, or if you wish to keep your monopolies, the regulation must stipulate a company can't deny customers service.

Corporations cannot be allowed to both have cake AND eat it. They'll just abuse their monopoly situation for their own benefit.


RE: Come on, Netflix is not alone.
By Nutzo on 11/5/2010 1:18:05 PM , Rating: 3
quote:
You guys need MORE regulation


Maybe your regulation/regulators actually work down in Australia. Here in America the regulation are the problem!

The local city/county/state grants these companies virtual monopolies, then lets then charge high rates and provide poor service (it's easy when you are the only game in town and bought protection from the government). In places where the local government gets out of the way and allows competition, the prices drop and service improves.


By GotDiesel on 11/5/2010 12:52:33 PM , Rating: 2
LOL.. that assumes of course one has a competitor isp to actually move to.. i'm in a monopoly area.. so i have only 2 choices.. crap service or no service..


RE: Come on, Netflix is not alone.
By Solandri on 11/5/2010 3:29:09 AM , Rating: 2
Netflix's unlimited service only costs $7.99/mo. Even at 3 movies a month, it's worth it.

No, what's going to happen is the people with ISPs who cap their "unlimited" internet are going to hear their friends with better ISPs talking about how great Netflix is. These people will then complain to their ISPs about how outrageous the cap/price is, or switch if there's a viable competitor.


RE: Come on, Netflix is not alone.
By AlexWade on 11/5/2010 8:33:00 AM , Rating: 2
Unfortunately, in rural America your choices are satellite internet, cellular internet, or DSL, if you are lucky. If you are unlucky, just satellite internet. This country needs a much better internet infrastructure and it needs net neutrality. Unfortunately, every senator or representative who was supporting net neutrality lost and the republicans are more concerned about turning back time. They weren't voted in because of net neutrality. Please let the new representatives and senators know to push for net neutrality. Do it now, before corruption sets in.


RE: Come on, Netflix is not alone.
By FITCamaro on 11/5/2010 8:38:47 AM , Rating: 1
Government is the reason we have such a poor internet infrastructure. Not the solution.


By omnicronx on 11/5/2010 9:32:12 AM , Rating: 2
Lets face it, the Telco industry is a monopolistic opportunity playground, it was going to happen anyways with or without government intervention, and is the case all around the world.

So lets not kid ourselves here, in the here and now, Profitability is the main reason why you have such poor infrastructure in rural areas, not because of the government..

Its just not profitable to build infrastructure in rural areas in most cases when you could be spending money on areas with higher population densities.


RE: Come on, Netflix is not alone.
By gamerk2 on 11/5/2010 9:33:08 AM , Rating: 4
Please, stop it. Ever since the internet was de-regulated (Thank you, FCC), almost all foward progress has come to a halt. You are seeing free market economics in action: In the lack of any compeititon, its cheaper to simply throttle users then upgrade infrastructure.


RE: Come on, Netflix is not alone.
By twhittet on 11/5/2010 9:46:28 AM , Rating: 3
Exactly - it's a lot easier for companies to put high speed anything in a few large cities and rake in $ than it is to put that same service to millions of remote locations. Without the government, most farms probably wouldn't even have normal telephones right now.


RE: Come on, Netflix is not alone.
By Spivonious on 11/5/2010 11:16:35 AM , Rating: 1
Are you referencing the Telecommunications Act of 1996? I don't know about you, but my 12Mbps cable modem connection is a lot faster than the 28.8k dial-up connection I had in 1996.


By HoosierEngineer5 on 11/5/2010 6:16:40 PM , Rating: 2
My only (non satellite) internet possibility is at the same 52 kb/s that I had back in 1998. I believe I was using a 200 MHz Pentium Pro back then.

I live less than 3 miles from a city whose size is in the to 75 in the nation.

Sorry, I don't believe I can support the argument. In fact, the commerical internet providers are not working diligently to provide upgraded internet service. There no incentive. They have monopolies, know it, and are motiviated to maximize profits. That may be OK if there are alternatives available, but for something that is as essential to everyday life, it is unacceptable. Capitalism relies on competition to drive prices down and improve service. Without this, you get the type of behavior displayed by the internet service providers. The only alternative I am aware of is government intervention.


RE: Come on, Netflix is not alone.
By FITCamaro on 11/5/2010 12:48:03 PM , Rating: 2
Why is there no competition though? Why can't communities build their own internet services as some have tried to do?

GOVERNMENT!

Yes in rural areas, no ones going to want to build. Guess what? That's what you get for living in the middle of nowhere. Fast internet isn't a right. It's a service. A luxury. The rest of us shouldn't have to subsidize your internet because you choose to live in the middle of nowhere.


RE: Come on, Netflix is not alone.
By Iaiken on 11/5/2010 1:03:21 PM , Rating: 3
quote:
Why is there no competition though? Why can't communities build their own internet services as some have tried to do?

GOVERNMENT!


???

You mean those cases were the municipal government tried to provide an internet infrastructure for their locale and the local telecom buried them in court? Did you also forget that in every single instance of that happening, the plaintiff was also the sole service provider in the area. In every case, the plaintiff was able to restore their previous monopoly.

Face it, competition in the north american communications market is a total sham because the exceptions (competition in major cities) disprove the rule (there's no competition outside of major cities).

In cases where there are hostile monopolies that are taking advantage of the population, the government must step in somehow. I personally don't care if it's regulation, anti-trust suits or fostering competition (in all it's forms), but until that happens, the telecoms are just going to keep taking advantage of their current position.


RE: Come on, Netflix is not alone.
By FaaR on 11/5/2010 1:09:32 PM , Rating: 3
Sorry, WRONG.

It's the corporations that block community ISPs, and they do so vigorously even though the reason those communities built their networks is because those same corporations offered such crappy (or non-existant) service that they were forced to.

So the corporations who on one hand don't want those communities as customers, can't stand those communities as a percieved competitor. Your anti-government stance stands at odd angles to reality buddy. You should educate yourself better before speaking out on this matter again... ;)

Ars have written a number of times on this matter, here's the most recent one just a day or three ago:
http://arstechnica.com/tech-policy/news/2010/11/th...


By FITCamaro on 11/5/2010 3:38:04 PM , Rating: 2
quote:
It's the corporations that block community ISPs


Yes they do it through the mandated monopolies they were given.


RE: Come on, Netflix is not alone.
By mostyle on 11/9/2010 7:20:39 AM , Rating: 2
quote:
push for net neutrality


Really? In America? I'm thinking not. Unfortunately we have bred a society that thinks it is okay to push our ideals on to another because our way is 'better.'

We as Americans aren't taught to be neutral. Look at the info were fed by the media constantly. In one form or another we are told what to think or believe and unfortunately a large part of the population doesn't fall into the 'free thinking' category whereas they actually would form opinions that are truly theirs rather they see an existing ideal and fall in line with it.

Popular media... There is a reason its called popular.

In case you're wondering... I am American. I just loathe the ease with which a lot of Americans can't see past the smoke and mirrors and form their own ideas.

-Tony


RE: Come on, Netflix is not alone.
By Spookster on 11/5/2010 1:24:48 PM , Rating: 1
quote:
by inighthawki on November 4, 2010 at 10:15 PM

quote:
Honestly, what would stop them?

Perhaps people canceling their service because they can only stream 3 movies a month on their unlimited netflix plan? People don't pay a monthly fee to get access to unlimited movies if they can only watch a few before getting massive overage charges.


I've been streaming Netflix through my PS3 ever since they first started offering that service on the PS3 and have never encountered a 3 movie limit per month.


RE: Come on, Netflix is not alone.
By Fritzr on 11/10/2010 1:51:08 AM , Rating: 2
5GB monthly cap minus 5GB of streaming movie==maxed out on Netflix. He is just using 3 movies as approx 5GB of movies.


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