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Netflix Video Puts Even More Strain on the Internet

Online streamer’s video traffic rises more than 35% year over year, according to study

Netflix continues to be the biggest hog of Internet bandwidth in North America, with its video traffic jumping more than 35% in March from a year earlier, according to a new study.

The video-subscription company accounted for roughly one-third (32.3%) of peak-period downstream traffic on fixed-line broadband networks in North America, about the same as last spring, an analysis by network equipment vendor Sandvine found.

YouTube’s video usage has surged at an even faster pace in the past year, now accounting for 17.1% of downstream Internet traffic in North America, up from 13.8% a year ago, according to Sandvine’s study.

At the same time, overall average monthly consumption by broadband users in the region rose 39% year over year, to an aggregate mean of 44.7 gigabytes. That means Netflix’s overall data load increased in line with that because its share remained approximately the same and YouTube’s bandwidth growth would have exceeded that rate. (Sandvine doesn’t report data usage estimates by application in absolute terms.)

As streaming video services from Netflix and others push broadband usage through the roof, cable and telco broadband providers are scrambling to add more capacity to their networks to try to stay ahead of demand that shows no sign of slowing. But Netflix disagrees with the suggestion that its service places a burden on Internet networks — arguing that it actually benefits ISPs, by giving them a way to upsell customers to higher-speed tiers.

“The fact that Netflix is a third of peak downstream Internet in North America is just a sign that Netflix is very popular and people love to watch streaming video,” Netflix rep Joris Evers said. “It is also a great driver of demand for broadband Internet.”

Netflix said it streamed more than 4 billion hours of video globally in the first quarter of 2013, compared with 1 billion per month last June. The company has packed on customers, adding about 2 million U.S. streaming subs to stand at 29.17 million domestically — making it bigger than HBO in that regard.

Netflix could grow to be two to three times the size of HBO, to 60 million to 90 million subscribers worldwide, topper Reed Hastings said on the company’s earnings call with analysts last month. “We’ll really only know that with any confidence when we get there,” he said.

To manage costs as Internet video traffic continues to soar, Netflix has embarked on a program dubbed Open Connect aimed at broadband service providers. By directly connecting with ISPs, Netflix saves money on content-delivery costs.

As an incentive to get service providers on board, Netflix allows Open Connect partners to provide higher-quality Super HD — comparable to Blu-ray video, according to the company — and 3D titles to their mutual customers. Optionally, ISPs can deploy Netflix-supplied caching servers in their data centers for additional performance gains.

Of the top 15 broadband providers in the U.S., Netflix has signed up Cox Communications, Cablevision Systems and Suddenlink Communications for Open Connect. Netflix has emphasized that it doesn’t ask for any payment from ISPs to hook into its private content delivery network.

Meanwhile, Netflix and YouTube are pushing the limits on mobile networks, too, although average mobile Internet data usage is less than 1% that of fixed-line networks in North America, according to Sandvine. YouTube represents 27.3% of downstream mobile Internet data, while Netflix had a share of 4% (up from 2.2% a year earlier).

The data in Sandvine’s report was collected from a sampling from Sandvine’s customer base of 200 service providers worldwide.

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