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Netflix Eats Up More Internet Traffic & 'Cord Cutters' Consume More Than Ever

First Posted: May 14, 2014 07:22 PM EDT
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Netflix now takes up about a third of North America's peak downstream traffic, according to a new report by network analysis company Sandvine. The company's report also purportedly shines a light on "cord cutters," a segment of internet users which it says is using more than seven times the data of typical internet users.

Netflix Continues to Take Over the Internet

According to Sandvine's analysis, Netflix made up 34.21 percent of all North American downstream traffic for (non-mobile) internet subscribers during peak usage hours, as measured over the first half of this year. YouTube continued to take a distant second place, making up 13.19 percent of downstream traffic.

(Sandvine)
(Sandvine)

Interestingly, file sharing, like BitTorrent, has accounted for less and less peak traffic, possibly indicating that more people are using Netflix and other streaming services rather than pirating movies and music. As of 2014, BitTorrent's share of peak downstream traffic has slipped to sixth place, at 3.4 percent, though it still occupies the largest amount of peak upstream traffic in North America, at nearly a quarter.

"Cord Cutters" Use The Most Data

Sandvine's analysis found that the top 15th percentile of video users ("cord cutters") dominate overall network usage, using more than seven times more data than the "typical subscriber," which the company labels the 70 percent of users in the middle.

The report shows that "cord cutters" stream an average of 100 hours of video per month, taking up an average of 212 GB of data, compared to typical users who spend 9 hours streaming and take up an average of 29 GB of data per month.

(Sandvine)
(Sandvine)

Such figures might inform cable companies' motivations when it comes to possible mega-mergers or razing net neutrality protections.

Are They Cord Cutters?

But there's a major caveat in Sandvine's "cord cutter" data. "Cord cutter" is the label given to internet users -- mostly young people -- who use the internet to access all of their entertainment via digital streaming and downloading, thus "cutting the cord" with the cable company (at least the television cord, since most cable companies provide the only fast, affordable internet in most areas of the U.S.).

Sandvine calls the top 15 percent of bandwidth hogs "cord cutters," but admits it cannot tell which percentage of users subscribe to a T.V./Internet bundle and which only pay for the internet.

"While we are unable to resolve if these subscribers have 'cut the cord', their usage profile indicates that they are likely using streaming as a primary form of entertainment," states Sandvine's report. So basically, they're making an educated guess.

Coming from a household with several streaming subscriptions going to tablets, computers, and one living room T.V. that's only internet-connected and used for streaming hours of content every day -- but a household that nevertheless subscribes to a bundled, underused live T.V. service -- I can tell you the top 15 percent isn't completely comprised of cord cutters. I might be the outlier, but there's an argument that some people (like journalists or any media-gobbling creative fields) might simply stream more than others -- cord cutting or not.

Why Does It Matter?

As Peter Kafka on re/code mentioned, these figures, showing an increase of data usage year by year, point to potential problems in the future, broader in scope than even the current FCC/net neutrality debate: data caps.

Data use is going up, and while Sandvine shows that average monthly data usage falls in line with many of their ISP customers' forecasted growth rate, the 15 percent outliers are getting closer and closer to hitting monthly data usage caps -- which Kafka mentions AT&T has already set at 250 GB per month, and which Comcast is experimenting with a 300 GB limit in some areas. Update: According to Ars Technica, a leak from Comcast shows the company is reportedly planning to roll out a 500 GB limit to all customers within five years, which could affect the 60 percent of U.S. broadband households served by the possible Comast/TWC mega-ISP.

When those users hit the data caps, cord cutters or not, they're forced to pay extra fees. But because in-house streaming services, like Comcast's Xfinity app, don't count against the data cap -- similar to AT&T Wireless's "Sponsored Data" proposal -- once more T.V.-bundled media hogs hit the wall, the only viable streaming content option will be the ISP's, unless you want to pony up for more Netflix access. This would implicitly be a competitive advantage, undoubtedly leading to another Netflix/Comcast (or whatever ISP) row.

Kafka accurately cautions that this is still a theoretical problem. But looking at those numbers, especially compared to previous years (for example, only two years ago, the average monthly downstream usage was 60 percent of what it is today), you get a sense that data caps and the continued growth of internet data use --driven mostly by higher quality video, not more hours of couch time -- are going to collide at some point in the near future.

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