Netflix is enjoying an inordinate amount of success, with over 20 million subscribers and a solid base from which to stay ahead of the rest of the market when it comes to online video.
However, the sheer amount of bandwidth Netflix users are burning through is putting the company in the firing line of increasingly-tight ISPs.
Netflix
has enjoyed a meteoric rise to the top of the online video tree. After starting out exclusively as a DVD-by-mail company, it switched its focus to delivering a Web video streaming service just a few years ago. And it’s made quite a success of the venture.
At the end of April Netflix reported having 23.6 million subscribers, which took it past Comcast (on 22.8 million) to officially become the largest subscription video service in North America. But that success, and those sorts of numbers, mean Netflix is accountable for an increasing amount of Internet traffic.
Netflix Traffic
According to a new report by Sandvine, Netflix is now the number one source of Internet traffic in North America. During peak hours the service is responsible for 29.7 percent of downstream traffic, up from 21 percent six months ago.
Netflix is above HTTP Websites (18 percent), YouTube (11 percent), BitTorrent (10 percent) Flash Video (5 percent) and iTunes (3 percent). Apart from ordinary websites such as this one six of the Top 10 involve video in some way or another. Which is a confidence boost, for sure, but won’t do anything to appease the ISPs delivering this video to our computers and mobile devices.
What’s helped the jump in part is Netflix’ move into Canada, where it has already built a customer base of 800,000 subscribers. Although that may not sound a lot, it’s actually 10 percent of those who have broadband.
Bandwidth Caps
This is all fantastic stuff, except for one thing. ISPs around the world, but particularly in the U.S. and Canada, are introducing bandwidth caps to prevent users from overusing (their philosophy, not mine) the Internet services they good money for.
ISPs are increasingly doing this as a response to rising bandwidth use as people consume more content via the Web. But that’s a situation that is only going to exacerbate as digital content becomes king. I foresee trouble ahead, and Netflix is going to be one of those companies on the front line.
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