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Internet trends report predicts that real-time entertainment applications will account for 55 to 60 percent of peak aggregate traffic by the end of this year

A study of internet trends conducted by Sandvine has revealed that North American web users have become increasingly interested in on-demand applications like Netflix, and this enthusiasm for real-time entertainment categories will likely continue to grow.

Sandvine is a provider of intelligent broadband network solutions for fixed and mobile operators. It releases a Global Internet Phenomena Report annually, and has done so since 2002. These reports analyze internet phenomena and traffic on the web in North America, Latin America and Europe. 

In the Global Internet Phenomena Report: Spring 2011, Sandvine found that Netflix is now 29.7 percent of peak downstream traffic in North America, and has become "the largest source of internet traffic overall."

In 2009, real-time entertainment applications consumed 29.5 percent of peak aggregate traffic, and today, that number has increased to 49.2 percent. According to Sandvine's predictions, this category will account for 55 to 60 percent of peak aggregate traffic by the end of this year.

In Europe, real-time entertainment has steadily increased to 33.2 percent of peak aggregate traffic from 31.9 percent in fall 2010, and BitTorrent (peer-to-peer file sharing protocol) is the largest source of upstream internet traffic at 59.7 percent and also downstream internet traffic at 21.6 percent. The study reported that European subscribers consume twice the amount of data as North Americans.

In Latin America, real-time entertainment accounts for 27.5 percent of peak aggregate traffic. The report also found that social networking accounts for 14 percent of network traffic, which is more traffic than YouTube

"The information and trends in Sandvine's Spring 2011 Global Internet Phenomena Report emphasize the need for innovative solutions to keep up with rapidly evolving consumer demands for content and connectivity," said Dave Caputo, President and CEO of Sandvine. "The dramatic growth of Netflix and its impending global expansion are prime examples of a growing appetite for real-time entertainment. It is also important for fixed and mobile broadband providers to have real-time policy control capability, made possible by insightful business intelligence, in order to put sound strategic decisions into action."

The Spring 2011 Global Internet Phenomena Report is based on anonymous and voluntary data collected from mobile and fixed service provider networks in North America, Europe and Latin America, and over 220 service provider customers in over 85 countries.

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RE: Party will end
By therealnickdanger on 5/18/2011 8:28:37 AM , Rating: 3
ISPs are getting more customers and charging those customers more for access, so Netflix is good for them. When Netflix finally rolls out 1080p streaming and/or 5.1 surround sound streaming, you can bet that the ISPs will be waiting with higher-priced, higher bandwidth "options" for customers. So even though ISPs might be losing some TV and phone business, they can compensate via raising prices and landing exclusive deals. Also, lots of people get sucked in with package deals and temporary pricing deals and such. The ISPs are doing fine.

Also, it's not like the content on Netflix is constant. It's ever-changing. Sometimes they gain new shows, sometimes they lose them. Customers that always need to see the latest and greatest shows on premium channels and can't wait for it to hit Netflix will still pay for it. The smart ones will still torrent. :)

RE: Party will end
By myhipsi on 5/18/2011 9:43:29 AM , Rating: 2
This is a good part of the reason why some ISPs have begun to use a usage based model (and more will in the future). Not only does Netflix compete directly with ISP/cable's own on-demand service, but Netflix doesn't have the cost overhead of infrastructure to contend with (they just use it). You will see court cases in the near future as Netflix will complain about users being forced to use their cable companies on-demand service vs. netflix's because of usage caps. Should get interesting.

RE: Party will end
By therealnickdanger on 5/18/2011 10:07:15 AM , Rating: 2
Netflix is also likely to get more expensive, unfortunately.

They are toying with the idea of individual memberships instead of blanket household memberships. So right now, I can have six devices access the service at once from the same $13/mo account (unlimited streaming + Blu-ray), but if they switch to an individual-based model, it's hard to believe they wouldn't raise prices substantially.

I'm sure constant legal battles and exclusivity battles will only further drive prices up as the service continues to decimate the competition.

Oh well, the market will pay what the market will bear... right?

RE: Party will end
By sorry dog on 5/19/2011 11:13:24 AM , Rating: 2
I don't see why users would have a legitimate case for their right to Netflix is impeded by usage caps.

Obviously the caps are in place to help ISP's own demand programming compete, but most ISP have been smart enough to implement these caps a while ago or recently before the issue becomes mainstream. This does not affect most cable users now, so it's not really a competitive compliance issue yet. Additionally, the ISP's can say the caps are there for other reasons as well. But they saw the writing on the wall...3% of the users made of half the traffic by filesharing, but once mom and pop learn how to use Netflix that 3% being high users will become 20% and weak spots of a ISP's infrastructure will become more apparent.

Rather than lawsuits I think more of what we will see ISP making deals with different content services to be more competitive with Netflix. The ISP I work for is going to do a deal with TIVO to augment their on demand offerings.

Rather than the ISP's suffering the entertainment players that face the biggest change is the traditional content providers like ESPN, TNT, Disney, etc. Their fee structures are what drives the majority of price of a basic expanded package price. ESPN alone is like $2 or $3 a subscriber. The ISP's have other products to sell if consumers find other ways to get programming besides an expanded channel package...Showtime and HBO have a bigger fight on their hands.

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