Netflix Accounts For 20% Of US Peak Time Downstream Broadband Traffic: What It Could Mean For Video DAM

Online video distribution business Netflix accounts for 20% of all peak time traffic and their business is now giving some Hollywood executives cause for concern about the amount of leverage they are acquiring according to this Hollywoodreporter.com article:

“”…just about every major content creator now has a streaming deal with Netflix. The company secured streaming rights to 49 percent of the domestic box-office tally for 2010 and continues to sign up Hollywood partners. “Even though it has a detrimental effect on their business, everyone keeps feeding them content,” BTIG Research analyst Richard Greenfield says.Why? Despite the risks, many in Hollywood welcome another market for content, especially one as hot as Netflix. During peak surfing times, for instance, the Netflix service accounts for a fifth of downstream traffic on U.S. broadband networks…” [Read More]

While the broadband utilisation figures clearly indicate Netflix’s popularity, an alternative perspective on the broadband figures is how limited the current capacity of US broadband actually is.  If Netflix reported subscribers are just 17m, this suggests that US broadband could very quickly be swamped and unusable if their rate of subscriber acquisition is maintained.

As reported at the end of last year, 68% of US consumer internet connections are not ready for HD and the corporate DAM video market has relied (and still will in the future) on initial mass consumer adoption to generate the economies of scale and commodity service offerings that make them cost effective.  One does have to wonder where the capacity to support the consumer market will originate from and how many corporate DAM users will be able to support enterprise-wide mass video delivery on their own?

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