Netflix content is now the top Internet traffic source in North America

For the first time, in possibly the history of the entire internet, it appears paid content accounts for the largest percentage of internet traffic.  According to the most recent Global Internet Phenomena report compiled by Sandvine company, Netflix streaming traffic now accounts for 22.2 percent of wired network download traffic in North America.  Bit Torrent holds the second place position at 21.6 percent.

Netflix content is now the top Internet traffic source in North America

Sandvine’s report also has other interesting information showing that during peak time’s Netflix grabs 30 percent of all traffic.  In addition Real-Time Entertainment (sports, movies, TV shows, etc) makes up 49.2 percent of internet traffic in North America in 2011.  That number was only 29.5 percent just two years ago.

There are a few important things to keep in mind about the numbers provided in this report.  First, the percentages reported by Sandvine are not percentages of total internet capacity but rather percentages of usage.  ISPs shouldn’t be able to look at this report and immediately use it as a justification to the rising incidences of data caps on their high speed internet packages.

The second thing to keep in mind is that the overall percentages reported for the last three years show a steady decrease in peer-to-peer traffic but the reports in no way show a sudden drop off in that type of traffic.   In fact the decrease in P2P traffic that’s been seen since 2009 has been very slow.  It’s very likely that a large decrease in P2P traffic won’t be seen until a significant percentage of movies are available via services like Netflix.  There is still a huge portion of back catalog movies and even new releases that are not available on streaming services like Netflix.

The last and arguably most important point about Sandvine’s report to keep in mind is that the company is well known for their network management services.  The most relevant example is Sandvine’s deep packet inspection technology which was used by Comcast to decrease the speed that could be achieved by BitTorrent.  This solution was used by the ISP in 2007/2008 and Comcast has since moved on to a different solution. The fact that it was provided by Sandvine and their newer solutions are advertised in the report definitely provides a certain amount of doubt on the accuracy of the data or the slant of their reporting.

The report does make the important point that companies must start planning for large portions of internet traffic to be made up of streaming video.

“With the rapid success of Netflix in Canada,” the Sandvine report notes, “Internet providers worldwide, regardless of access technology and degree of mobility, must plan for a future in which on-demand video (whether provided by Netflix or another service) is a large proportion, if not the majority of, last-mile traffic.”

These types of statistics could strongly influence the future of high speed internet packages provided by ISPs.  Companies like AT&T have already enforced data caps on their DSL lines and Comcast has attempted to demand more money from Netflix to stream their content.  It seems the companies with the most stake here are those whose Television services are being impacted by Netflix.  If future statistics continue to demonstrate the consumer’s insatiable desire for streaming video content, ISPs will be forced to reconsider data caps or modify their television packages to be more attractive to their consumers.