New data from network policy control provider Sandvine suggest something many in the

industry have been suspecting for some time: Internet video usage now rivals basic cable

usage.



Sandvine's Global Internet Phenomena Report: Fall 2011 (PDF) contends that entertainment

applications are the primary drivers of network capacity on fixed access (non-wireless)

networks in North America, accounting for 60 percent of peak downstream network traffic

from 7 p.m.-9 p.m., up from 50 percent in 2010.



The report, suggests Dave Rosenberg, who wrote a piece on the new study for CNET, says

“we've entered a post-PC era where the majority of the traffic is destined for devices

other than a laptop or desktop computer. Fifty-five percent of the real-time entertainment

traffic is consumed via game consoles, set-top boxes, smart TVs, tablets, and mobile

devices.”

Online movie providers have had their hands in the technology for some time and, after some

struggles along the way and divisive issues over content pricing and ownership and

licensing, it appears the technology is finally clicking.



But the bigger question, says Rosenberg, is what this portends for the future of pay TV as

a whole. Cable companies, he suggests, “have developed a bit of a monopoly in certain

geographies as the primary (often only) choice for cable TV and/or Internet service. And

considering that broadband Internet prices have largely normalized and cable prices have

increased, one has to wonder cable companies will protect their margins as users take

advantage of cheap bandwidth to get online content.”



That said, Apple's success with iTunes content sales, which are expected to reach $13

billion in 2013, ushered in a new way for users to pay for content. And in the new

biography of Steve Jobs, author Walter Isaacson wrote that Jobs told him, "I'd like to

create an integrated television set that is completely easy to use. It would be seamlessly

synced with all of your devices and with iCloud."



TV and movies are available for download on a number of different online websites, many for

free or a minimum monthly service fee. However, there are other big-players in the arena

to contend with, including Apple and Google.



Google's approach to the market, suggests Rosenberg, is that the company has “largely

avoided producing hardware and instead has worked through distribution channels such as

TiVo to get YouTube on set-top boxes. “Google, however, has already shown that it can keep

content in sync across browsers and mobile devices, so it clearly has a huge opportunity

here as well,” says Rosenberg.



What happens next, Rosenberg points out, is unclear. In addition to the content producers,

there

are also “a number of hardware providers who would have to get on board with any of these

strategies and realistically, while Apple generally does a better job of offering a

complete solution, Google's ubiquity and desire to sell ads, rather than hardware, could

give them an upper hand.”

View all Jason Drew's articles

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