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Netflix Crushing Competitors, Here and Overseas

Photo of remote control with Netflix button (Photo Credit: televisione @ https://www.flickr.com/photos/televisione/18526855496/, CC 2.0)
Sean Fang Fri, 17/07/2015 - 22:37

Netflix is eighteen-times bigger than its nearest competitor, Amazon Prime Instant Video, when it comes to peak Internet download traffic in North America. The data, courtesy of networking firm Sandvine and published in Netflix's latest earnings report, shows the streaming giant is still the most popular online service, at least during peak Internet usage times, beating the likes of YouTube, BitTorrent and Facebook. Netflix accounted for 36% of all Internet usage during peak hours, with Amazon and Hulu at only 2.0% and 1.9%.

And in the latest update of Roy Morgan's poll of streaming platforms in Australia, Netflix's subscriber base has dramatically increased compared to the data for May, where it was already estimated to be ten-times bigger than the next most popular platform, Foxtel and Nine's Presto. Roy Morgan now estimate Netflix's subscriber base to be at 1.42 million people in 559,000 homes, up by nearly 400,000 in just a month.

Graph showing peak download Internet traffic in North America from 2010-2015, provided by Sandvine
Sandvine Peak Download Internet Traffic in North America 2010-2015

The Roy Morgan poll also more closely examined just which Australians ISPs had the highest number of Netflix subscribers. Unsurprisingly, Telstra's dominance meant that it had the most number of Netflix subscribers, at 142,000 households, but at the same time, it also had the lowest proportion of Netflix subscribers compared to the total number of Testra Internet users (at only 5.2%). This is perhaps due to the lack of any Netflix related promos being offered by the company. As a comparison, ISP iiNet, which has an unmetered data deal with Netflix, had the highest proportion of Netflix users (16.8% of their users are already on Netflix). Optus, which offered an extended trial as well as unmetered data, had the second highest proportion of Netflix users (at 11.7%, or 102,000 households with Netflix).

Graph showing percentage and number of Households with Netflix, by fixed broadband provider, data from Roy Morgan
Roy Morgan: % and Number of Households with Netflix

Optus's deal with Netflix has just ended, and Tim Martin, General Manager of Media at Roy Morgan Research believes that this could open the door for other telcos to step in. The increasing popularity of Netflix, and the associated high bandwidth usage, could also affect the NBN project and how it prices its wholesale services.

"For internet service providers, Netflix can be a double-edged sword. Rapid uptake can see internet traffic soar, with significant and targeted network investment required to keep pace with the demand. NBN Co in particular will need to keep a close eye on how subscription video on demand affects adoption rates in particular areas," says Martin.

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