On Sept. 22, Netflix began offering its streaming movie service in Canada. This was Netflix's first venture outside of the U.S., and because the company wasn't offering its traditional DVD-by-mail plan to Canadians, its prospects seemed questionable. How many people would pay $7.99 (Canadian) per month for the chance to watch Superbad whenever they wanted?
A lot, it turns out. According to Sandvine, a network management company that studies Internet traffic patterns, 10% of Canadian Internet users visited Netflix.com 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.
It's not just Canada. 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. According to Sandvine, Netflix accounts for 20% of downstream Internet traffic during peak home Internet usage hours in North America. That's an amazing share—it beats that of YouTube, iTunes, Hulu, and, perhaps most tellingly, the peer-to-peer file-sharing protocol BitTorrent, which accounts for a mere 8% of bandwidth during peak hours. It wasn't long ago that pundits wondered if the movie industry would be sunk by the same problems that submarined the music industry a decade ago—would we all turn away from legal content in favor of downloading pirated movies and TV shows? Three or four years ago, as BitTorrent traffic surged, that seemed likely. Today, though, Netflix is far bigger than BitTorrent, and it seems sure to keep growing.
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