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May 14, 2013

Netflix Still Tops in Downstream, But YouTube Poses Competition

By Steve Anderson, Contributing TMCnet Writer

Netflix is absolutely huge when it comes to bandwidth. It's been one of the biggest sources of downstream bit usage for some time now, and it's not hard to see why. Streaming a huge amount of content into users' homes takes up plenty of bandwidth, and Netflix's prices make it a wonderful alternative for those who want to save money on entertainment. But Netflix may not be top of the heap much longer in terms of fixed broadband in North America, as a new challenger is emerging in the form of another familiar streaming site: YouTube (News - Alert).



The new study from Sandvine showed that Netflix still had the top of the heap at 32.25 percent of fixed-network downstream traffic during the peak period of 9 p.m. until midnight for the first half of 2013 in North America. This is down just a bit from last November's Sandvine (News - Alert) report, which put it at 33 percent, and actually sticks with reports from 2012 in which Sandvine asserted that Netflix had "hit its peak."

Part of that decline may be owed to YouTube, who saw a substantial jump in its peak time bit consumption, going from 13.8 percent previously to 17.11 percent of all peak downstream traffic. That jump is attributed to a phenomenon known as "home roaming," in which smartphones and tablets are used on a home network rather than on a mobile network to stream video. Only recently, YouTube announced a slate of subscription channels, which makes it look just a little more like Netflix, and offers up a little more in the way of content possibility.

The Sandvine report also noted something of a change in the way people access those fixed networks, with 20 percent of all traffic coming from mobile devices on that home network. Further, adoption rates are on the rise, with Apple (News - Alert) devices accounting for better than 45 percent of all streaming audio and video when it comes to fixed networks.

Not surprisingly, Sandvine was quick to note that the drop in Netflix's bandwidth use wasn't a sign that the service was losing popularity to competitors, as services like Amazon Instant Video and HBO Go also saw drops, and in greater relative share than Netflix could post. Meanwhile, YouTube dominated mobile traffic, pulling in 27.33 percent of peak traffic, while HTTP only brought 19.16 percent. Rounding out the list were Facebook at 8.67 percent, MPEG at 7.32 percent and Google (News - Alert) Play at 4.37 percent.

What's more, Sandvine is predicting that this is the year for long-form video on mobile networks, as expressed by remarks from Sandvine CEO Dave Caputo. Netflix traffic has, according to Caputo's remarks, been climbing on mobile networks by as much as double over previous measures. This shows a willingness to watch long-form content on mobile devices' screens.

There is evidence in both directions, really. Gains in YouTube suggest more of an interest in short form content, especially if YouTube's aforementioned pay channels start gaining ground. Yet with Netflix also gaining, there may be interest in long-form content, though there's plenty of lesser long-form content on Netflix in the form of 22-minute sitcoms and the like.

While it's probably still a bit early to go determining whether the future is in short film or three-hour epic from this study, it's still enough to make some wonder if maybe the next generation of feature films will show up in blocks of three minutes or less.




Edited by Alisen Downey
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