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What we're really using the Internet for: Real-time entertainment and Netflix

June 9, 2011

by Jeff Jedras

Some very interesting statistics released yesterday from Sandvine, a Waterloo-based company that provides broadband network solutions to fixed and mobile operators, as part of its spring 2011 report on global Internet phenomena.

Based on March 2011 Internet traffic statistics voluntarily submitted by a representative cross-section of Sandvine’s customer base, the research found that real-time entertainment traffic now represents 49.2 per cent of all peak (evening) Internet traffic, up from 29.5 per cent in 2009. That’s well ahead of P2P file sharing in second at 18.6 per cent, and traditional Web browsing at 16.6 per cent. Web browsing held top spot in 2009, at 38.7 per cent.

Why the change? Clearly how we consume media content is changing, and you can bet the cable companies are watching. We’re getting more and more of our entertainment online. The top single source of downstream traffic in peak hours is Netflix, accounting for 29.7 per cent of traffic. HTTP is well back at 18.36 per cent. On the upstream side, BitTorrent is dominant at 52.01 per cent.

These trends have to be concerning for Canada’s cable companies, and explain in large part their forceful reaction during the usage-based billing debate. The major providers sell us both Internet and cable/satellite TV. But while these numbers show there’s a major shift in where we get our media away from the traditional channel to the Internet, and while they make money off both, they make a heckuva lot more from cable/satellite TV packages than they do from Internet access. They want to make up that revenue somewhere.

What does it mean for the channel? Well, these numbers show the need for capacity is going to grow, so it’s not a bad time to be in the network equipment business. These trends also won’t stay confined to the home; we’re going to be consuming a lot more web-based media at the office too and partners should help their customers ensure their networks and policies reflect the shift.

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