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A recent article from Slate Magazine thinks that might be the case, as American broadband capacity might not be able to keep up with everyone who wants to stream movies. For instance, on 9/22, Netflix began offering its streaming movie service in Canada. According to Sandvine, a network management company that studies Internet traffic patterns, 10% of Canadian Internet users visited in the week after the service launched. And they weren’t just visiting—they were signing up and watching a lot of movies. Netflix videos quickly came to dominate broadband lines across Canada, with Netflix subscribers’ bandwidth usage doubling that of YouTube users.

The article says Netflix is swallowing America’s bandwidth, too, and it probably won’t be long before it comes for the rest of the world. That’s one of the headlines from Sandvine’s Fall 2010 Global Internet Phenomena Report, an exhaustive look at what people around the world are doing with their Internet lines.

Sandvine has been publishing annual reports on broadband usage since 2002. RBR-TVBR took a look at the 2010 report. Within North America, Sandvine observed that Real-Time Entertainment is the largest contributor to data consumption on both fixed (43% of peak period traffic) and mobile access (41%) networks. Within that category, Netflix is already a major source of content, accounting for 20% of downstream Internet traffic during peak home (fixed) Internet usage hours in North America–8pm to 10pm. That beats YouTube, iTunes, Hulu, and peer-to-peer file-sharing protocol BitTorrent, which accounts for 8% of bandwidth during peak hours.

Fixed access networks in North America deliver the highest prime time ratio (1.42) of any network examined in this report, indicating that subscribers are able to increase their usage during the evening without being constrained by
the network

There is wide variation between the average amount of time per month for which fixed and mobile Internet connections are active; fixed connections are active for about 3 hours per day, while mobile connections are only active for about 45 minutes per day, said Sandvine’s report.

In the last 18 months, Netflix has signed deals with TV networks and movie distributors that let it add a lot more movies and shows. Netflix’s streaming service is now available on a wide range of devices—laptops/PCs, iPhone, iPad, Apple TV, Blu-ray and DVD players, Wii, PlayStation 3, Xbox, and a range of Web-connected TVs.

So, will there be enough available bandwidth for Netflix to keep growing? points out that in the hours when Netflix hits 20% of broadband use, it’s being used by just under 2% of Netflix subscribers. That stat has huge implications for how ISPs manage their lines. If 2% of Netflix customers account for one-fifth of the traffic on North American broadband lines, what will happen when more and more Netflixers begin to watch movies during peak times?

Slate did look at the bright side: Theoretically, broadband capacity isn’t fixed—as people begin using bandwidth-hogging services like Netflix more often, they’ll subscribe to faster Internet lines, and that will push ISPs to build out their capacity. Earlier this year, Netflix predicted that its shipments of DVDs would peak in 2013—after that, the number of discs it sends out will begin to decline. The future of Netflix, then, is the Internet. It’s an open question whether the Internet can keep up, Slate concluded.

RBR-TVBR observation: In general, internet bandwidth usage is skyrocketing due to uploading and downloading of video, for starters. Mobile entertainment will increasingly tax both fixed and mobile networks as more and more eyes move to the third screen. Social networking’s sharing of videos and audio takes what used to be an email to a few friends to potentially thousands, as Facebook has shown us. Will all of this crash the internet? It could. All it would take is a huge glut of people peaking their usage at the same time. The only likely thing that would cause that is a national emergency. But even if that occurs, we doubt folks would be using to net to upload or download videos. There’s plenty of redundancy on the internet for traffic issues—a massive cyber-attack should be more concerning.