Each year Sandvine produces a report on broad band network usage and trends. The big news coming out of the report this year is focused on Netflix. The report notes that “Netflix is now 29.7% of peak downstream traffic and has become the largest source of Internet traffic overall”. That alone should be an interesting statistic, but what really makes a statement is that it has now eclipsed P2P file sharing (which is broadly assumed to be pirated content more than legitimate file sharing). Perhaps I’m jumping to conclusions here, but I would think this should cause traditional delivery services (Cable, Satellite, etc) to take note. Streaming or Internet delivery of content is viable and people are willing to purchase it (vs having to do illegally) if you provide a model that works. Part of that model is a cost structure that is compatible with the offerings. Granted Netflix has had to increase it’s subscription costs in the past year, but offerings in the $10 range for streaming and DVD delivery seem quite reasonable compared to the $60-$150 a month for cable and satellite offerings (to include premium services).
Additionally you can compare overall broadband usage against that of Europe where Netflix is not a factor. You can note that Real-Time Entertainment has been static while there is an increase in P2P sharing. Amazon is hoping to recreate this trend in Europe as they have purchased Lovefilm.com which was a DVD-by-mail service only until recently which has now entered the world of Internet streaming too. If Lovefilm.com enjoys the same success as Netflix in the US, Amazon will have done quite well with this purchase and will probably resurrect more rumors of Amazon to purchase Netflix.
If the major cable and content providers don’t take note at this point, I believe they do so at their own peril. Yes I’m somewhat of an early adopter for technology, but Netflix has easily taken over as 80% of our television content at home. I’m more than ready to drop my cable service, if I could only get a good reasonable ISP that wasn’t a cable provider….