Netflix Now The Largest Single Source of Internet Traffic In North America | Hacker News Reader

Netflix Now The Largest Single Source of Internet Traffic In North America

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201 pointsssclafani81 comments

I hope we can now have the MPAA and RIAA realize that, actually, most people do want to pay, they don't choose to pirate because they are all inherently bad, and they don't need to be sued from the face of the Earth to show how bad they are.

What changed is what the customers value, and how much they will pay for it. The $9 I spend a month on Netflix is $108 a year, which is far more than I have paid for DVDs in the past. I don't value owning physical media or individual movies, I value streaming and libraries.

But, of course, why change now? Why should the RIAA bother trying to get Spotify-like services launched in the US? Who needs evidence and metrics when you can have vitriol and blame?

You're exactly right and this really hammered it home for me; the generation today is not into owning a physical piece of media.

In the 70's, owning an LP was awesome (and necessary) because there was usually some effort put into the artwork. Today, no one wants to own a mass produced DVD/BluRay Disc with shitty artwork and no liner notes.

Some CD's still come with good artwork, but the generation now values owning digital media.

> the generation now values owning digital media I think you've missed the point, it isn't about ownership at all, or even that the media is digital. Its that what we value is access to the media. We're willing to pay a nominal fee for access to it, but that's really all we care about: Having the media play when we want it to. Ownership of the media is irrelevant to our experience of the media...unless not owning it means we cannot experience it.

Yes, this was what I was getting at. I don't want or need to have some physical object that tells me "this is my media". We've been through enough format changes to understand that "this is my media for ten years, then I'll need to convert it or buy it again." Access is the key, not ownership.

That being said, I am deeply concerned about central media control allowing companies and governments to become revisionist; editing out controversial portions of various works as they see fit. I would like to see legislation that would prevent that.

>We've been through enough format changes to understand that "this is my media for ten years, then I'll need to convert it or buy it again." Access is the key, not ownership.

I guess this is what the RIAA/MPAA doesn't like with the streaming business, they can't resell the same material every time a new standard comes out.

I think that it isn't the value of digital media that has increased... no one values something that is readily available. It is the value of LPs that has significantly decreased in the face of the convenience that digital media provides.

I'ma bit older than the current generation, and I'm not into owning physical media. Packaged software has seemed obsolete for at least 10 years, and packaged CDs or DVDs just seem absurd. Currently, a CD is a one time vessel to transport high quality audio to my computer to turn into MP3s. I've used the CD drive on my two year old MacBook exactly twice. Buying a CD to get music just seems absurd, but I do like accompanying media. I'd love if my favorite bands would mail me a glossy pamphlet when I bought an album, that is more exciting than a downloadable pamphlet.

My brother, on the other hand, is a bit older and fetishizes music packages. He still has a giant shelf of cassettes, a rack of records, and a huge row of CDs, elaborately alphabetized.

I'm of the current generation, and I'm into owning CDs. As far as music goes, burned albums have been around since middle school and earlier, but to me having the actual jewel case signifies ownership and support of the artist, even if I mostly listen to their music on an mp3 player.

But that's just my thing; DVDs I care much less about. I do value physical books significantly, though. The difference is, of course, is that a stack of dead trees is independent of electricity (unlike CDs or DVDs) yet has higher resolution than anything electronic.

For me, as a member of that current generation, I value highly my ownership of digital files. I can't get into things like Rdio, I love Pandora for just throwing on like a radio though.

But when it comes to my music collection, I've been gathering these MP3s for something like 13 years now. And many of my most valued recordings are audience/soundboard recordings of live shows, something the current services don't really offer.

I see. Perhaps the 'generation' that comes after you will be the people who treasure their AmazonBook Cloudplex Music and Pandora.FM accounts, and reject beaming music directly into their minds.

> but the generation now values owning digital media.

It's not necessarily that the generation does not value physical ownership anymore, but that there rarely is any value left in physical ownership.

This is the case in just about any digital media: a few years ago, video games came in big cardboard boxes lush with items, with big manuals and interesting artwork, etc...

Today, they generally come in plastic DVD cases with a 2-leave "booklets" which isn't worth the cost of the paper it's printed on, and even "collector" editions are garbage.

There are exceptions to this trend: The Witcher II on the video game side, or some deluxe packages (NiN's Ghosts I-IV "Deluxe" and "Ultra-Deluxe" limited editions were awesome, so were Danger Mouse and Sparklehorse's DNOTS book package and Sigur Rós's Með suð í eyrum við spilum endalaust, as far as I'm concerned) but by and large physical ownership is worthless, because there is no additional value in it[0] compared to purely digital. edit: and there usually is a severe loss in usability (you have to install or transcode the physical media to your digital devices), plus no gain (most DRM-laden purely-digital media tend to be DRM-laden as physical products as well, so physical ownership is just a shiny box for your virtual leasing).

[0] not completely true for music, services or artists offering lossless tracks are few and far between overall, so while I've pretty much entirely switched to non-physical ownership for video games (via GoG and Steam), I usually go with physical for music, but my motivations to do so are not the most common: I consume my music with an album or artist granularity (I never buy single songs), I value the lossless quality (CD or above) as a backup source and I don't mind waiting for music (I don't buy huge amounts of it and tend to go "all out" when I do, getting the complete discography of a given artist in one fell swoop)

I buy CDs because I find value in paying $10-12 for a CD that I'll listen to multiple times. There are CDs that I bought 15 years ago that I still listen to multiple times in a year or even a month.

I do not buy DVDs because I find no value in paying $30 for something I'll watch once and then let sit in a box somewhere. Instead, I pay Netflix $8 a month to watch a a couple movie or TV series in a month. I don't have something lingering around on a shelf taking up space I'll never use again and I think $8 is a reasonable price.

If these new business models cannot support the current size of the movie industry they're still going to complain. An industry will never voluntarily shrink. Spotify is a great example, since IIRC they are paying most of their revenue to the labels yet that is still dramatically less money than the labels made from CDs.

perhaps, but being paid _something_ if significantly better than getting nothing at all -- let us not forget that in their heyday, CD prices went up to $15-$18 apiece, and people paid because there was simply no other option.I seriously doubt that the record industry wants to made obsolete to everyone but the few vinyl enthusiasts that are still out there.

This raises the question of whether Netflix/Spotify/etc. are replacing piracy or DVDs/CDs. If it's mostly the latter, the industry should wait for the old system to finish collapsing before embracing the new one.

Even assuming you're also paying for Hulu Plus, MLB.tv, and a few iTunes/Amazon rentals, you're still spending far less than the average cable subscriber.

And having our more specific needs met. As a consumer, I have never bought into this idea that I need packaged channels. I am happily moving along into the on-demand culture, a culture that is also crossed with intelligent recommendation systems tailored to me as opposed to the general viewing public in an area.

That's fine, but you can't exactly blame MPAA, RIAA for not readily embracing a business model of making less money.

Yes, I don't really see how the RIAA/MPAA would be excited by this. I don't think the entertainment industry is sustainable at $9 per month per household.

Now if someone could created an integrated device around the $200 price point that will allow me to watch these items via the Internet and still DVR OTA broadcasts, I'd be set.

Roku is close, but they don't do the OTA part. TiVo is way too expensive to just use for OTA and they're very slow I brining on new online content.

SSSHHHHHHSSSHHHHHH!!!!!

You're giving away Netflix secret sauce!

They KNEW the shift in perceived value and have completely owned the execution of exploiting that shift.

This is why I said that netflix is YEARS ahead of every other player.

Plus, they have Adrian as their cloud arch and he is a damn genius.

The way I see it, Netflix is like a negotiator on the side of viewers. The job they have chosen for themselves is to make the biggest pile of content they can, and charge for access to the pile. So, in a real sense, they are working for the people that want access to the pile. This is part of why Netflix customers get a personal sort of attachment to the service, it feels like they are on "our side" (or at least, the interests and incentives line up).

This is seen for me in a few things. Media type was/is irrelevant; whatever the group of people paying to see the pile want is what the will try to do. Service above and beyond the strict terms of contract. I can't be the only person to whom this has happened: the next disc on my queue was found in Netflix's system, but very far across the country. So they sent that one, but knowing it wouldn't arrive in the usual prompt time frame, they also sent the next one at no extra charge. I don't know of any contractual terms that forced them to do that.

Producers, distributors, and advertisers have long had a seat at the negotiations table in the media world. I feel like Netflix has taken the role of being the viewers' representative at that table, and they are doing very well in that role. No wonder old media companies don't care for them much.

I can't wait to see this all come to a head. Netflix's CEO isn't shy about calling the industry out on their bullshit, while the industry continues to lie about available bandwidth -- insisting that it is very limited, near maximum capacity, and very expensive (none of which is intrinsically true and only artificially so by their own machinations).

Netflix could end up doing a lot of good for the consumer beyond just providing entertainment at an affordable price, at the rate they're going.

It's certainly the largest single source of internet traffic at our house, and within that subset, streaming Dora the Explorer Season 1 is the largest single source of internet traffic coming from Netflix.

I literally know about four or five people that have Netflix almost purely to stream Dora and Thomas.

... or Beakman's World, Dr. Who, and McGyver.

Our netflix usage is 99.5% kids shows. Pretty much all the PBS cartoons are on there, NOVA Science now is on there, Thomas and Friends, Dora the Explorer etc. We use hundreds of GB every month streaming media and have no plans on going back to cable or satellite. My wife can get some of her shows via hulu at her desk, some of them on the TV and if she is patient she'll get a whole season at once on netflix.

That being said, we'd use even more bandwidth with Netflix if their on demand streaming selection didn't suck for more recent releases. I don't watch a ton of older movies and those I do want to watch over and over again I own on DVD or Bluray which I would prefer to use since the quality is better and there's never any buffering problems.

Not to mention that young kids will watch shows over and over and over again. When my daughter (now 11) was that age, we mostly used DVDs, but these days netflix would be a fabulous investment for meeting that need.

Beyond watching the same thing over and over again, his tastes will change suddenly. We've gone through a phase where he was into nothing but Toy Story, followed shortly by Cars, then back to Toy Story, then Thomas, and now back to Cars. We aren't purchasing nearly as many DVDs as I had anticipated because he's perfectly happy watching Hero of the Rails or Misty Island Rescue another time and both are streaming. By having a variety of kids shows available we are also saving quite a bit on disc replacement costs. He can work the PS3 but doesn't really get that touching the bottom of the $30 Bluray discs is not a good idea.

Oh man, Misty Island Rescue is one of my son's favorites. He's on a Leapfrog kick right now, but we'll see how long that lasts.

Dora (etc) works magic at restaurants with fussy toddlers.

iPhone + 3G + handy stand = quiet(ish) meal.

If find it hard to believe that the free YouTube, which gets 500M uniques a month--over 100k in the US alone--gets less traffic than Netflix with 23m members.

US traffic stats http://www.quantcast.com/youtube.com http://www.quantcast.com/netflix.com 11m (obviously doesn't count xbox and apps, etc)

Really minutes spent is the most important factor to look at. with 5x the uniques, and being free, I wonder how total minutes spent with netflix content compares to youtube's.

That's exactly what I was thinking. This doesn't add up, netflix can make that much traffic, given that only 7m of their subscribers actually use online viewing. This very suspicious IMHO, netflix doesn't even appear in april's comscore report.

You're not taking into account quality of picture. I use about 150gb a month from netflix (it has replaced my cable).

Usages are completely different. People look at a few YouTube videos in a given day, usually at low quality for a few minutes. Some people, like me and many people I know, have completely replaced cable and network tv with Netflix. Streaming an episode of Lost at 720p is going to take up a lot of bandwidth.

Agreed, it's bandwidth and the duration. In our household, we watch many 20-40 minute shows in a day. Probably a total of 2-10 hours depending on the day. We also watch lots of youtube videos, but it's 1-5 minute videos which amount to a total of 30 minutes or an hour a day.

Maybe YouTube is just compressing stuff at a much lower bitrate than Netflix.

Most people watch a few minutes of low-res YouTube videos a day maybe, versus 2 hours per movie of HD + 5.1 Surround at night on netflix. Netflix HD is ~2 GB/hour. So I can easily see Netflix driving more BW than youtube.

We don't even need to make the comparison so bold. the world could consume twice(I do not have statistics) as many hours of youtube as it does netflix, but still netflix would demand higher bandwidth...

Netflix HD is 2gb/hour...what is the bandwidth taken by youtube?

yesterday, i watched one youtube video, 30 seconds long.

yesterday, i watched three netflix videos, 45 min long each, totaling 2:15.

i only count as 1 unique for each, but i used netflix 430x longer than i used youtube (not even considering bandwidth differences -- netflix was higher quality). just because there are more uniques doesn't mean that they're spending the same amount of time on the videos.

It's similar to how something like Pandora can use massive amounts of bandwidth despite just being streaming audio, because people listen to it for 8 hours per day, 25 days per month.

And it does not even have the latest movies available for streaming. By latest I mean good interesting movies released in the last year or two. It does better with TV shows but still does not have many shows. All I am saying is the traffic is only going to go up.

I find these benchmarks slightly confusing. There are protocols/technologies mixed in with applications (or sites). Isn't there going to be huge overlap in these? Facebook vs. HTTP? Flash video vs. YouTube?

My assumption is that it's shorthand, as in "HTTP" actually means "HTTP excluding <others on list>". Could be wrong.

Likely what they mean by HTTP is HTML(and related) over HTTP

I find these benchmarks slightly confusing. There are protocols/technologies mixed in with applications (or sites).

This is the opposite of ordinary end-users, who have problems distinguishing between protocols, technologies, applications, and sites.

What does this have to do with anything?

If you're trying to have a go at a web startup, probably everything.

Interesting what AWS can do at scale. Also important to design for the system limitations.

Edit: rewrite

It is highly unlikely AWS can handle that kind of load. AWS may be responsible for the netflix interface, but video streaming (the bulk of the data) is handled by CDNs such as Akamai.

Netflix isn't using AWS for their bandwidth. The media files themselves are being served by Level 3's CDN (http://www.reuters.com/article/2010/11/11/us-levelthree-idUS...). Netflix is using Amazon for a lot of their application servers, but when you're serving as much bandwidth as Netflix is, you go with a CDN for media distribution.

That's not to say AWS is bad or anything, just that AWS isn't supporting all that bandwidth for Netflix.

That is mostly correct. Most of the traffic is coming from the CDNs. But we also use Akamai and Limelight in addition to Level3.

Thanks for the clarification.

Are the files encrypted before placement on the CDN or does the CDN handle the DRM?

I believe the processing (and probably encryption) is done before the CDN using EC2 or some similar service.

"That puts Netflix above HTTP websites (18 percent), BitTorrent (11 percent), and YouTube (10 percent) as a source of downstream traffic during peak times in North America. (BitTorrent still accounts for half of all upstream traffic)"

I don't understand this -- surely every downstream requires a corresponding upstream? Are they only counting upstream from domestic users? Or is the vast majority of bittorrent traffic to american users coming from seeders outside the US?

Upstream: sending data. Downstream: receiving data.

With HTTP and media streaming you send very little data ("I'd like this web page, please") and you receive lots ("here's the entire content of the web page"). With BitTorrent you send lots of data (fragments of files to other peers) and you receive lots (the fragments of files you're missing).

With HTTP you still send an ACK for every incoming packet. A friend of mine at university was the technically minded person at his fraternity, and he found that just the outgoing ACK:s were saturating the DSL line.

Media streaming might be done over UDP, depending on the protocol, which should alleviate this a bit.

You don't need an ACK for every incoming packet. But even if you send that many you're looking at 40-64 bytes out per 1400+ bytes in.

And now I have my stupid typo all over the Internet under my real name. How embarrassing. (Worse---I work for a network appliances company!)

You can send a HTTP Get Request which is an upstream traffic less than a KB, and get back 100KB in data (downstream). Torrents where users have a 1:1 seed ratio, will ideally have 100KB upstream for every 100KB downstream.

Downstream has a higher total volume than upstream. (Case in point, Netflix.) 11% of downstream and half of upstream may represent the same absolute bandwidth.

They are counting only at one end -- in this case, the client. So, traffic inbound/outbound from commodity ISPs. The traffic leaving servers is not typically considered "upstream".

So since netflix is being the single best provider with virtually no "all you can eat" competitors and their userbase is ever growing - how long until a price increase?

At 25 million subscribers, means for every $1 increase they will get another $300 Million a year. That's too tempting to resist, no?

At $8/mo I have no problem with paying for Netflix for what I can get out of it right now. We get all of our sons content from Netflix and my wife can get some of the TV shows she liks from Netflix. I would probably pay up to $10/mo for what is currently available. However I would be really aware of every price increase due to the fact that 99.9% of what I want to watch is DVD only. It sounds crazy since $10/mo isn't really that much money, but anything over that and I'd probably cancel the service due to the poor selection of recent titles and the only "ok" quality of the video stream.

edit: I should add that we are on the verge of cancelling Hulu due to the large number of device restrictions. We don't care much for the back catalog of shows or movies so there's no value in that. When we also can't stream a show to the TV and have to watch it on the PC that's a disincentive to use the product.

Except that the price is likely a factor in all three of the reason you've cited. There's no real competitors because Netflix does a great job off an already low price. They have the market and are serving it well. That's ridiculously difficult to break into. Their growing userbase is possibly as much a result of the price as it is the features, so upping that jeopardizes that position as well.

You are right, though. In many companies that would be too tempting to resist. From what I've seen it looks like Netflix's CEO has loftier goals than even what they're doing now. I'd like to think he plans on focusing on having enough money to keep building the market for a bit longer before switching gears to caching in.

List of products/services that show that crusading anti-piracy media publishing companies are full of it: Netflix, Steam, Hulu, O'Reilly Media, that one anime streaming service that was covered previously by Ars Technica... who else?

iPlayer is the British equal (not equivalent - http://en.wikipedia.org/wiki/Television_licensing_in_the_Uni...) with no recent data, and they intend on expanding at the ISPs cost http://www.ispreview.co.uk/story/2010/11/18/bbc-system-to-na...

I wonder if this data will change anything about the argument for net neutrality? The big telecom companies were already complaining about companies like netflix, skype, google etc. making huge piles of money by driving lots traffic and pulling lots of bandwidth for users; I'm sure Comcast wouldn't mind being able to charge customers a premium for a "Comcast Netflix package" with faster movie loading times, etc.

Thinking about this from a technical point of view, would it make sense for Netflix (or even ISPs) to put in content-aware routers than can cache frequently requested bits?

Won't this help, to a certain extent, alleviate the congestion? Of course, the assumption here is that for a large enough population, you will have more than one person requesting the same content in a given time period.

Netflix provides machines to Large ISP's to reduce congestion. I don't know the specifics, but I suspect both Netflix and the ISP save money by doing so.

Netflix uses a variety of CDNs (Content Delivery Network). I think Level 3 is currently their primary provider and they used to use Akamai. I'd say there's a fat chance of seeing Comcast benevolently caching Netflix traffic.

As I mentioned elsewhere Netflix does use Level3, Akamai, and Limelight. So the traffic is mainly coming from CDNs.

I'm not sure if by "content-aware routers" you mean something like Content Centric Networking:

http://www.ccnx.org/

If that's the case it'd be up to the ISPs to push that technology to their infrastructure. Van Jacobson gave a very informative presentation at Netflix about it a couple of months ago. It seems you can watch a similar presentation he gave at Google on youtube:

http://www.youtube.com/watch?v=8Z685OF-PS8

At least two of Netflix's three CDNs place servers or connections within the ISPs. Akamai has servers deployed within almost every ISP, and Limelight has peering connections to their datacenters. I'm not sure about Level3 (and they've been pretty tight-lipped given the Comcast brouhaha).

Rather than caching on the router side, I believe most of the magic happens in the load-balancing side. The effect (to the end-user) is the same, though.

Depends on whether Netflix is encrypting the bits of the content or some other kind of DRM.

Interesting to note that Google ( Youtube was known to loose money so I am not including it for the rest of this comment ) is no where to be found but FB is on all 3 list. FB isn't getting more $ per ad than Google ( probably less ) but their underlying technical cost to handle an individual users is apparently far greater.

> most of the video to the home is cached on the edge of the network rather than going through the backbone.

I'd like to know more about what this means exactly. Do they have complete copies of their streaming library all over the place so that everyone is downloading from a relatively local source?

'Facebook' is something that can be compared to 'HTTP' or 'ssl'? That second chart is deplorable. Whomever created that needs to go to some sort of remedial school to study making sense.

Over here in Euroland, we can only cry ourselves to sleep until they finally stream movies over here!

Could we please ditch the pre-historic distribution and TV stations already and switch to a more demand-oriented paradigm?

I know it sounds like a pain in the ass, but I've got a somewhat stable solution.

Invest in a good VPN with several US based end-points (I like StrongVPN myself) which by itself will allow you to watch normal Hulu. I personally then go a little further and use a US based mail forwarder (which I use for several other things, not just this) to sign up for Hulu+ and Netflix.

It costs me about $20 per month, plus the standard cost of Hulu+ and Netflix obviously.

That's a great idea! Why is it costing you $20/month? You can get a US forwarding address with no monthly maintenance fee here: http://bit.ly/f4v9Je

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