Netflix Gets 32% of Peak Bandwidth

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Netflix may have been in trouble for its premature announcement of a split between its streaming and DVD business. But Netflix might still be at the top of its game, capturing more than a third of peak bandwidth usage in the U.S. in 2011 to date.

Netflix earlier announced it was splitting its streaming and DVD businesses, in an effort to focus more on each aspect of the business. This has been promptly retracted, though, which resulted in a drop in Netflix’ market value. But even with business setbacks, it seems Netflix is among the biggest sources of traffic in the U.S., accounting for a third of peak bandwidth.

The 2011 Sandvine Internet Phenomena Report says that the top four biggest Internet services in the U.S. account for 64.4%  of all network traffic. These include YouTube, BitTorrent, HTTP and Netflix streaming. The video-streaming service actually accounts for 32% of downstream bandwidth usage during peak hours and 28% of bandwidth use at all times.

The study also suggests that the end might be near for the dominance of desktop-based computers in terms of internet use. Non-PC devices, like set-top boxes, game consoles, smartphones and tablets now account for 55% of network traffic, while only 45% goes to desktop and notebook computers. As such, Sandvine CEO David Caputo says that businesses and networks doing network planning, particularly by ensuring that content is tailor-fit to the device being used for viewing. Video streaming providers might be using a one-size-fits-all approach in content delivery, without considering that some users might be accessing content on smaller screens or mobile devices.

Communications Service Providers need to have detailed business intelligence on not only the devices being used but also the quality and length of the videos being watched so they can engineer for a high subscriber quality of experience and not simply adding capacity through continuous capital investment.

Still, even with its dominance in the use of bandwidth, Netflix will have to address business-related issues plaguing the service, such as losing 800,000 customers in Q3 2011, company layoffs and loss in investor confidence.