Sandvine: Streaming Video is 70% (Netflix 37%) of NA Fixed Traffic; BitTorrent is 4.4%

A new study by Sandvine focusing on Africa, the Middle East, and North America (based on data from a selection of Sandvine’s customers), finds that:

• "Real-Time Entertainment (streaming video and audio) traffic now accounts for over 70% of North American downstream traffic in the peak evening hours on fixed access networks. Five years ago it accounted for less than 35%
   
• Netflix (37.1%), YouTube (17.9%), and Amazon Video (3.1%), the top three sources of video traffic on fixed access networks in North America, all saw an increase in traffic share over the levels observed earlier in the year
   
• With the growth of video, BitTorrent share continues to see a decline in fixed access bandwidth share, and now accounts for only 5% of total traffic in North America. Last year during the same period it accounted for over 7%". 

See "Sandvine: Over 70% Of North American Traffic Is Now Streaming Video And Audio" - here.

Amdocs on Network Optimization Competition

During Amdocs' Q4 2015 earning call, a question was asked about the network optimization market, to which the company has entered using several acquisitions - Celcite (2014, $129M, here) and Actix (2013, $120M, here)

[related post - "Amdocs CEO: 'Network Optimization Business is Slow'" - here]

[Q]  Tom Roderick [pictured], Stifel Nicolaus, Analyst

.. Eli. Curious for your additional thoughts on the competitive landscape and the network optimization business. You mentioned, I think, obviously you guys have been the disruptor in that market. I know Cisco has made some moves competitively. Some of the other NEPs have, as well. What are they doing, what are the traditional network equipment providers doing to protect their position, whether it's through pricing or bundling or things of that nature and how, what are they doing as a response to your disruption in the market?

[A] Eli Gelman [pictured], President & CEO. Amdocs:
    

To be honest, the first thing they do is they try to use a lot of fear against us, because we are the new guys in this area. They will try to slow this thing as much as they can. They will not announce it necessarily, but we see from everywhere. It's not like a specific company I can tell you all the guys that are producing a lot of boxes are trying actively to slow down this trend. I don't think they can do it. Even if they slow it down, it would not take, let's say, five years to come to full fruition. Maybe it will take seven years. You can not slow this down.

And I'll tell you more than that. Carriers cannot afford not to do it, because otherwise, the big guys will do it themselves. Level 3 will do it. Amazon would do it. They will build their own networks. And if the carriers are not careful, both, by the way, MSOs, the Comcasts and the Charter of the world, and the AT&T and Verizon of the world, if they would not do it, other people will do it for them or to them. So they have to do it.

The providers will try to slow it as much as possible. They say that they are investing in it and all of that. I don't think so. And every time that they see that they are a buying company, we've seen in several cases like this, they kill the company. In other words, they buy companies that have some momentum in this area and especially to kill them and not to build them. And we have a very different opinion. We have a different opinion that we have infrastructure and new components and new theory and new approach to this entire thing. And we'll see. We'll have the best man win.

See "Edited Transcript of DOX earnings conference call or presentation 10-Nov-15 10:00pm GMT" - here.

The Post-Net Neutrality Era - Does Verizon Shape Netflix and Amazon?

 
David Raphael reports in his blog about a chat he had with Verizon's support, in which the agent admittes that Verizon "is limiting bandwidth to cloud providers" which "exactly" explains why "netflix quality is bad now". 

"Frankly, I was surprised he admitted to this. I’ve since tested this almost every day for the last couple of weeks. During the day – the bandwidth is normal to AWS. However, after 4pm or so – things get slow"


See "Verizon Using Recent Net Neutrality Victory to Wage War Against Netflix" - here.

NSN Warns MNOs: OTT Outages Increases Signaling (20X!)

A blog post by Gerald Reddig [pictured], Head of Smart Labs Marketing, Nokia Solutions and Networks, reports that "Recent OTT service outages in cloud service provided by Google hit mobile operator radio access networks with an unexpectedly high signaling load. Online services rely entirely on the service availability in large data centers provided by Google, Amazon and Microsoft, for example.

NSN Smart Labs verified that a cloud service outage can trigger smart phones to generate signaling loads up to 20 times greater than normal. This is an important heads up for mobile operators to prevent chain reactions that could lead to network outages .. For the test, NSN Smart Labs utilized one popular high-end Android smart phone. Now multiply that signaling storm by thousands of smart phones simultaneously and radio access networks would definitely be compromised".

See "OTT service blackouts trigger signaling overload in mobile networks" - here.

[ABI]: OTT Video Revenues to Reach $20B by 2015

Here is what carrier and MNOs are fighting for - $20B content revenues in 2015, according to ABI Research findings.

"Companies like Netflix, Hulu, Apple, and Amazon helped drive the over-the-top (OTT) video market past $8 billion in 2012. The three largest markets—North America, Europe, and Asia-Pacific—experienced YoY growth in excess of 50% in 2012. The continued spread of connected CE and increasingly mobile devices, like tablets, are expected to push the market past $20 billion by 2015"

See "Over 60% Growth in Worldwide Over-the-top Video Revenue in 2012" - here.

AT&T, Comcast and Verizon Will Punish Naughty Subscribers

    

Seems like we have gone back a few years, when illegal P2P file sharing was the main (or only) source for on-line media. 10 years after media sharing started, CNET reports that US largest ISPs will (somehow) detect piracy and take actions against subscribers using it extensively. Since ISPs do not like these subscribers anyway, this may serve their goals as well.

Greg Sandoval  (picture) reports that "After years of negotiations, a group of bandwidth providers that includes AT&T, Comcast, and Verizon are closer than ever to striking a deal with media and entertainment companies that would call for them to establish new and tougher punishments for customers who refuse to stop using their networks to pirate films, music and other intellectual property, multiple sources told CNET .. Under the proposed plan, participating bandwidth providers would adopt a "graduated response" to subscribers who repeatedly infringe copyrights. ISPs would first issue written warnings, called Copyright Alerts, to customers accused by content creators of downloading materials illegally via peer-to-peer sites, the sources said. Should a subscriber fail to heed the warning, an ISP could choose to send numerous follow-up notices. The plan, however, requires ISPs to eventually take more serious action .. such as throttling down an accused customer's bandwidth speed or limit their access to the Web".

See "Exclusive: Top ISPs poised to adopt graduated response to piracy" - here.

"Sources in the music and film sectors said that their antipiracy measures, coupled with the emergence of popular legal services, such as Netflix and Amazon, which provide inexpensive content that is also easy to access, has put them in the best possible position to compete with Web piracy".

I'd add iTunes, who pioneered the idea of legal content at a reasonable cost. And one more correction - services with proper QoE!

Easy to Use Cloud Backup Maybe Expensive!

  

A new class of applications may be added to the list of "bandwidth hungry applications", in addition to usual suspects - P2P file sharing and video streaming. The story below shows how cloud based backup services may also consume enormous amounts of bandwidth. DPI vendors - please take care! 

A month ago I covered an article by Mathew Ingram (picture) to Gigaom, describing how he tried to locate what was consuming hundreds of Gigabytes per month on his Rogers home service (see "Every [Canadian] Family Needs a CIO" - here).

Now, Mathew published the sequel - this time with the exact reason - showing how user friendly services might cost the subscriber (in his case, when you have a metered service):

"Then a day or two ago, I got an email from Amazon with the bill for my Amazon AWS service. I have about 25 gigabytes of photos, music and other documents backed up to Amazon’s S3 server cloud, which usually costs me about $3 a month — but this time, the bill said $109 .. The culprit, apparently, was either Windows indexing the files or an anti-virus program scanning them, or both. Since JungleDisk [see the chart for its "bandwidth Limiting Function"] maps the Amazon cloud folder as a network drive, Windows and some other programs simply treat it as a regular drive and download all the files to scan them — even multiple times"

See below Amazon's "Data Transfer Pricing" information.

See "What Happens When the Cloud Meets a Bandwidth Cap" - here.

Infonetics: OTT Streaming Services Doubled Set-top Boxes Sales

  

Infonetics Research published a report covering the Set-Top Boxes and Subscribers market. While total sales showed a small decline in Q4 2010 (-1%), OTT Set-Top boxes ("standalone set-top boxes such as Apple TV, Roku Media Player, Boxee STB") market showed strong growth.
  

According to Teresa Mastrangelo (picture), Directing Analyst, Cable, Satellite, and IPTV Video - "In the fourth quarter of 2010, we witnessed the dramatic growth of over-the-top services, as service providers and equipment vendors hit the ‘sweet spot’ for pricing. However, these services continue to complement pay TV rather than replace it .. We also are seeing increasing demand for hybrid set-top boxes, which leverage the existing broadcast infrastructure, but utilize the broadband connection to incorporate OTT content and increase interactivity and on-demand services".

More OTT related findings:

• OTT media server revenue jumped 90% in 2010 (as providers such as Netflix and Hulu launched low-cost streaming services toward the end of 3Q10) , and is forecast by Infonetics to grow to $1.16 billion in 2015
   
• Netflix added more than 3 million subscribers in 4Q10—nearly twice as many as in the previous quarter, and 3 times as many as during the same period in 2009—now supporting a subscriber base that exceeds 20 million
   
• Hulu introduced its paid service, Hulu Plus, last year at a similar price point; its subscriber base is expected to exceed 1 million in 2011
   
• Amazon UK’s purchase of LOVEFiLM will likely drive increasing OTT media server demand in Europe

See "Netflix, Hulu drive big jump in over-the-top media server market; set-top box demand is up" - here.

Net Neutrality Comes in Pairs: Verizon and Google are Next

 
Like in Noah's Ark, pairs of network and content providers board the Net Neutrality compromise discussions (here) trying to avoid the Deluge (FCC forced regulation).

After last week's Amazon and AT&T's "win-win-win proposal" (here) we hear that Google and Verizon are developing their own "deal". Todd Shields from Bloomberg reports (see "Google, Verizon Said to Strike Deal on Web Traffic Rules" -here) that:

"The compromise as described would restrict Verizon from selectively slowing Internet content that travels over its wires [DSL and Fios/Fiber service], but wouldn’t apply such limits to Internet use on mobile phones, according to the people, who spoke yesterday and asked not to be identified before an announcement ..  

The two companies have become business allies through Verizon Wireless, the largest U.S. wireless carrier, which is co-owned by Verizon. Mobile phones that use software from Google, owner of the largest Internet search engine, helped Verizon’s profit this year."

This is not the first time we see Google and Verizon working on Net Neutrality see "More Signs for Net Neutrality Piece - Google and Verizon Joint Appeal to the FCC" - here, although Google changed its stand on the matter a number of times in the past (see "Google's Vint Cerf on Net Neutrality - Good for the Rich Content Providers?" - here) - clearly a conflict between its role (content provider, dependant on carriers) and economic power (can buy anything).

Jim Cicconi, AT&T's Senior Executive Vice President-External and Legislative Affairs who "couldn’t agree more" with Amazon's proposal, steps aside this time:

“AT&T is not a party to the purported agreement between Google and Verizon .. We remain committed to trying to reach a consensus on this issue through the FCC process.”

Net Neutrality - AT&T Endorses Amazon's Win-Win-Win Proposal

  

Paul Misener, VP for global public policy at Amazon.com, published a guest column at Cnet "Politics and Law" section, proposing a way to terminate the Net Neutrality debate.

See "A potential Net neutrality win-win-win" - here. 

Paul says that the problem is with applications and services that are performance sensitive, such as streaming video (i.e. Amazon interest) and VoIP, and suffer from the physical distance between the content provider and user (due to the number of nodes they have to go through). 

In order to solve the distance problem, content providers can, today "moving [the servers], leasing private lines, and edge caching [e.g. use CDN]".

Paul suggest to add another option - "Internet content providers (and consumers) should be able to purchase "quality of service" or "managed services" from network operators on the same basis--equal availability and no harm to other content". In addition he suggests that when capacity is increased "newly available capacity were dedicated to particular content".

Jim Cicconi, AT&T's Senior Executive Vice President-External and Legislative Affairs, quickly posted a supporting message into AT&T's Public Policy Blog - saying "I was particularly pleased to read Paul’s clear recognition that certain quality-of-service (QoS)/network management practices by ISPs are not only necessary but in the best interest of consumers. I couldn’t agree more."

See "The Not So Elusive Middle" - here.

I believe that this is a good compromise which addresses the existing guidelines of Net Neutrality, as long as it is appropriately disclosed to the subscribers. Of course, it gives some advantage to the bigger content provider who may pay the required amounts.

Nevertheless, proving that "no-harm to other content" policy is kept will be extremely difficult as well as deciding what portion of the bandwidth capacity is "basic" (which also has to grow over time) and what is the "newly available capacity" which is subsidized by the content providers/customers paying the extra.

Related posts:

• AT&T CTO:"AT&T recently faced a shortage of the components needed to improve its network" - here
   
• Charging for higher & tiered QoS is the Most Important Potential Strategy - here
   
• Skype: Operators' Tiered Services will Replace Our 3G Surcharge Plans - here