NETFLIX THE LARGEST SOURCE OF INTERNET TRAFFIC IN US

Netflix video streaming is now the single largest source of peak downstream Internet traffic in the U.S., according to a new report by Sandvine. The streaming video service now accounts for 29.7 percent of peak downstream traffic, up from 21 percent last fall.

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). As whole, “real-time entertainment” (which is mostly video streaming, but also includes streaming music) accounted for 49 percent of downstream traffic in March, 2011, versus 19 percent for P2P file sharing, and 17 percent for Web browsing.

Video files are so big that it does not take much usage for it to take over in terms of bandwidth consumed. But these numbers definitely point to a future where video accounts for more and more of the traffic on the Internet. As recently as last November, Web video alone accounted for an estimated 37 percent of Internet traffic.

But as Netflix CEO Reed Hastings points out, bandwidth to the home keeps increasing along with demand—he expects a gigabit to the home to be commonplace within ten years. As he told me earlier this month, “streaming is the core of our business,” but he also points out in the video below that most of the video to the home is cached on the edge of the network rather than going through the backbone.