Netflix Taking Over the Web

Discussion
May 18, 2011
George Anderson

Americans love to be entertained, and growing numbers are
going online in search of action, comedy and drama. In fact, according to a
new report, nearly 30 percent of peak traffic on the internet is going to Netflix.

Sandvine,
which has provided analysis of traffic on the web since 2002 with its Global
Internet Phenomena Report, found that consumers’ desire for
on-demand entertainment has grown from 29.5 percent of peak traffic to just
over 49 percent today. It predicts that number could go as high as 60 percent
by year’s
end.

Netflix, according to the report, is grabbing the biggest share of traffic,
at 29.7 percent of the total. In all, Netflix and other sites, including YouTube,
are responsible for about 46 percent of all downloads during peak online hours.

“The dramatic growth of Netflix and its impending global expansion are
prime examples of a growing appetite for real-time entertainment,” said
Dave Caputo, president and CEO, Sandvine, in a press release. “It is
also important for fixed and mobile broadband providers to have real-time policy
control capability, made possible by insightful business intelligence, in order
to put sound strategic decisions into action.”

The growth of movie and
television show downloads is causing cable and telecom providers to reassess
their go-to-market product and pricing strategies.

“My sense is something will have to give. If they are using more bandwidth,
the question is, who is going to pay for it?” Jeffrey Silva, an analyst
at Medley Global Advisors, told The Washington Post.

Ultimately, it seems reasonable
to assume, it will be the consumer who foots the bill.

Discussion Questions: What does the growing demand for entertainment on the internet mean for retailers and brands from a marketing perspective? Do you expect Netflix to continue dominating marketshare in this area for long? What are the implications for business operations with so much more of the available bandwidth being used for entertainment purposes?

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6 Comments on "Netflix Taking Over the Web"


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Paula Rosenblum
Guest
9 years 11 months ago

Seems to me the real question is “Where is mass marketing going?”

I don’t think it’s in TV commercials…it might be in product placement, which could be anywhere. But the marketing story is shifting…big time.

Tony Orlando
Guest
9 years 11 months ago

Netflix is convenient, and has a huge library of online downloads to watch for a fixed price. My wife loves it, and says it’s the best deal around. The other cable outlets will have to offer similar deals, thus making it better for the consumer in the long run. I think Netflix will be a force for quite sometime, until the competition heats up on something better, which again will benefit the consumer, so a win win for us!

Camille P. Schuster, PhD.
Guest
9 years 11 months ago

As technology changes and the opportunity to view entertainment from a variety of locations and devices continues, consumers will shift their preferences, choices, and demands. Netflix has been good at changing and adapting to new technology which consumers have appreciated. Whoever stays ahead and embraces new technology will be popular.

Ed Rosenbaum
Guest
9 years 11 months ago

Netflix has the market covered for now. But I can’t imagine that others will allow it to continue past the next few years. Seldom has one company controlled a market for the long run and it probably will not happen here. When viewers and consumers have options they will take advantage of them. Technology has not reached the point where it can beat Netflix for a family sitting in front of the TV. One person’s opinion.

Bill Bittner
Guest
Bill Bittner
9 years 11 months ago

Sounds like the FCC’s ruling on net neutrality is just in time. The Netflix Internet carrier is likely to be the first one implementing Internet surcharges. Netflix will be sidelined to a dedicated high speed channel on the Internet. This whole thing highlights the desire of people to get away from broadcast advertising. With more and more Internet sites adopting an overburdened marketing model the Internet has long ceased to be a way to escape from advertising. The Netflix customers are able to get away from it all. This leaves advertisers reaching a smaller and smaller group of consumers. I don’t think we are in any danger of exceeding the raw capacity of the Internet itself. As caching services become more prominent and intelligent spam filters improve on stopping spam at its origin, the expanded hardware capacity will be better utilized. This combination of improved content and better hardware will keep capacity growing.

Odonna Mathews
Guest
Odonna Mathews
9 years 11 months ago

Netflix is fun, convenient, and a family value. Just ask any kid in college (or their parents)!

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