CATEGORIES Features, Hot Topic

If you're reading this article, you're not using the Internet for its most common purpose. Which is, apparently, watching Netflix movies.

A new study by the Internet traffic experts at Sandvine suggests that Netflix streaming accounts for nearly 30 percent of bandwidth usage in North America, more Web traffic than any other source. In fact, real-time entertainment accounts for almost 50 percent of overall Web traffic.

That makes Netflix the biggest thing you can pay for on the Net (at least in terms of bandwidth), bigger than iTunes or such popular free-or-pay-a-little sites such as YouTube, Facebook and Hulu.

Sandvine measured downstream traffic during peak hours and found that 29.7 percent of that traffic involved the streaming of Netflix rentals, up 44 percent just from last fall, when Sandvine issued its previous traffic study. Even averaging peak and non-peak hours, Netflix still commanded 22.2 percent of traffic.

By comparison, file sharing on sites like BitTorrent accounted for just 18.8 percent of peak downstream traffic, about the same as last fall (19.2 percent). So paid legal streaming of movies may now be a much more prominent activity than illegal downloads, but piracy isn't going anywhere yet.


Other conclusions one might draw:

The Internet is now primarily an entertainment medium. That may seem obvious, but it's still striking to learn that, say, social networking and gaming aren't even among among the top five biggest traffic activities. Web browsing still is, but it takes up just 16.6 percent of bandwidth, less than half the percentage it accounted for just two years ago.

Netflix is only going to get bigger. Recent deals, like the one signed this week to make Miramax's classic library ('Pulp Fiction,' 'The English Patient,' 'The Crying Game' and other indie favorites from the last quarter century) available for streaming on Netflix is only hastening the day when Netflix becomes the Web's movie catch-all. (This despite the belated entry of such giants as YouTube and Amazon into the streaming marketplace.) By the end of this year, Sandvine expects the real-time entertainment category to rise from 49.2 percent of usage to 60 percent by the end of the year, with Netflix making up the bulk of that.

Your broadband bill will rise. To keep up with the increased traffic and the infrastructure costs associated with it, expect to see a lot more tiered usage plans, where you pay more for downloading or streaming every time you reach a certain gigabyte threshold. The days of one-size-fits-all pricing are just about over. (Sorry, low-income users, the full capacity of the Internet is not for you.) An article in the Washington Post's Post Tech blog this week explains in detail how this is likely to work.

Theaters? What theaters? Rising broadband costs aside, it seems the day is at hand when subscription-based home delivery onto the device of your choice becomes the primary way movies are distributed. Theatrical won't completely disappear; studios still depend on the hype and reviews surrounding a film's theatrical release as a marketing tool for the rest of a movie's lifetime on all other platforms, and there will always be teenagers and others who use movie theaters as a dating destination. But theatrical will be a loss leader, with most of a movie's profits coming from on-demand views at home or on mobile devices. The phrase "go to the movies" will sound quaint, since movies will go to you. And for that privilege, you'll be spending more and more for the services of a certain red-logo'd gatekeeper.


Follow Gary Susman on Twitter: @garysusman.

What Do You Think Your Biggest Bandwidth-Using Activity Is?
Streaming movies48 (59.3%)
Streaming video clips5 (6.2%)
Streaming music4 (4.9%)
File sharing9 (11.1%)
Gaming2 (2.5%)
Social media2 (2.5%)
Web browsing10 (12.3%)
Real-time communication1 (1.2%)