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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 ImEmmittSmith on 11/5/2010 11:00:33 AM , Rating: 0
Sounds great in theory, but then there will be very few insurance company options in the future. Health insurance companies cannot survive on 20% and stay profitable and continue to offer new products. NO COMPANY can survive on that! One Health Insurance company I worked for 15 years ago was very profitable, but has laid off 800 employees this year because of the Health Bill. Did not make sense to stay in business. So, they will be laying off the rest in 2011. This is a very BAD bill!!

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 ( ). 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

The linked independent study says insurance companies run with a 3.3% profit margin. Lower than Medicare. Who runs Medicare?
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.

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.

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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