Streaming service dominates U.S. bandwidth

Netflix is commanding more bandwidth than any other source of online video in the U.S. but may have peaked in this respect, according to a new report.

Traffic software manufacturer Sandvine issued a study Wednesday noting that Netflix accounted for nearly 33% of peak downstream traffic in September — up 10% from the spring, when it already led the pack.

That increase registered just as the controversial price increase that Netflix instituted was taking effect. Given the defection of subscribers Netflix just reported in the third quarter, the report suggests that Netflix could show a decline next time Sandvine monitors bandwidth volume in the spring.

Netflix dwarfs traffic driven by other popular video hubs online including YouTube (11.3%) and iTunes (3.1%). In September 2010, Netflix reached 20.5%.

In other Netflix news, the company eliminated 15 jobs amid a brutal week for the company’s stock performance, Bloomberg News reported. The cuts were concentrated in human resources, which had recently expanded in advance of the now-aborted plans to ramp up a separate division for its DVD business.

On Wednesday, Netflix’s stock recovered somewhat from massive declines, up 2.6% to $79.40.

A spokesman for Netflix declined comment.

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