A recent study from Sandvine (here) finds that "Netflix continues to dominate North American networks, accounting for 34.9% of downstream traffic in the peak evening hours" and even "On a fixed network in Australasia, where Netflix isn’t even available yet, approximately 2.5% of subscribers are accessing the service and it comprises as much as 4% of peak downstream traffic".
So everybody loves Netflix, but not all enjoy the internet connectivity allowing them to stream the movies and TV episodes with the expected QoE.
Aterlo Networks, a new start-up, led by ex-Sandvine employees ("Before starting Aterlo Networks Inc, our team worked together for years defining, building, architecting and managing mission-critical products which were deployed in some of the largest Internet Service Providers in the world" - here) changes that by adding a "local cache" to the home router.
"NightShift runs on your compatible home router with a connected USB flash drive. It seamlessly works with existing Netflix players. It analyzes your viewing patterns and predicts content to automatically download at night. Once a TV show or movie is downloaded, you can watch it from any Netflix player in your home the same way you always do. NightShift creates a temporary local copy of video content. It does not break or bypass DRM, and an Internet connection is still required".
Of course, with the presence of the software at the subscriber's access point, a lot more can be achieved, including QoE measurements, and other features to the ISP (Aterlo positions itself as a service provider solution (here). A sure challenge would be the distribution of the software to the mass market.