Sandvine Inc. published some very interesting analysis last week on Internet traffic. Here are our observations and perspective from the analysis:

Source: Sandvine Global Internet Phenomena Spotlight: Netflix Rising report

Media Distribution over the internet is by far the largest bandwidth driver and the biggest growth area for Telecommunications Companies, Content Delivery Network (CDN) providers and Cloud Service providers. This implies that protocols that use TCP for video delivery will continue to benefit from optimization technologies like Internap’s Accelerated IP (XIP™) service. Where XIP shines is in situations where you have high latency and are transmitting large files or streaming video. This is the case for the vast majority of video delivery, whether on-demand or live. Furthermore; as Netflix, Google, Apple and other content distributors move into new markets, they will find that higher latency connections are much more common than here in the United States. This reinforces the case for delivery platforms that have integrated reliable TCP acceleration capabilities at every phase of the process. Another observation we made is the variety of devices that are being used for streaming solutions and how the data clearly points to the Over-the-Top (OTT) video market finally taking off.

Definition: Over-the-Top Video or OTT is video and related television programming delivered via the Internet and bypassing traditional pay-for-television connections. Content is usually delivered via wireless devices existing in the household.

As reported, nearly two-thirds of Netflix traffic is driven through PlayStation PS3, Nintendo Wii and Microsoft Xbox gaming consoles. It’s hard to imagine that anyone would have predicted the extent of this development just five years ago and the concentration driven by just a few services. Surprisingly, the PC rated number three in the top devices – with only 20% of all traffic delivery overall. Most pundits in the early 2000’s would have told you that the PC was the next TV. According to Sandvine’s analysis, they would be wrong.