Netflix grabbing greater share of bandwidth

Cable killer or not, Netflix takes a big bite out of bandwidth every night in America.

Netflix accounts for nearly 30 per cent of downstream Internet traffic during peak times, more than any other source, says Sandvine Research (via Wired). Even when combined with upstream traffic, Netflix is still on top with almost a quarter of all peak Internet traffic.

In October, Sandvine found that Netflix accounted for 20 per cent of peak downstream traffic. That means Netflix is getting more popular, either among existing subscribers, new subscribers or both.

This is great news for content providers -- or at least, it should be. As Sandvine notes, Netflix has overtaken BitTorrent when traffic is averaged over 24 hours. While not all BitTorrent traffic includes pirated material, the data show that people are increasingly more interested in streaming legitimate paid content than pirating it if the price is right and the delivery is convenient. Of course, TV networks and movie studios are still skittish about Netflix because it threatens their other business models, including cable, video on-demand and DVD sales.

TV service providers, meanwhile, are starting to wage their own subtle war on Netflix and other bandwidth-intensive services. This month, AT&T started enforcing bandwidth caps of 150 GB per month for DSL customers and 250 GB per month for U-Verse customers, charging $10 for every addition 50 GB once the user exceeds the cap three times. If you watch scads of streaming video, you might call it a Netflix tax.

Netflix also got into a spat with Comcast last December over the delivery of streaming video traffic to subscribers. Comcast wanted more money from Level 3, an Internet transit provider that delivers Netflix content, and Netflix tried to paint Comcast's demands as anti-consumer. The issue is more complicated than that, but it underscores the tension between Netflix and Internet service providers, whose television business is threatened by streaming video. In January, Netflix riled up ISPs again by ranking their bandwidth performance.

This is only going to get uglier over time, especially if Netflix keeps gobbling up a bigger piece of the bandwidth pie. But for now, just sit back, relax, and enjoy your "Parks and Recreation" reruns with everybody else.

Follow Jared on Facebook and Twitter for even more tech news and commentary.

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