A new report from Ontario-based Sandvine indicates Netflix video streaming content currently accounts for the single greatest source of peak downstream Internet traffic in the U.S. (recently reported as 29.7 percent, up from 21 percent last fall).

According to TechCrunch: “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.”

The Global Internet Phenomena Report: Spring 2011 from Sandvine also offers the following observations:

• Real-Time Entertainment traffic is continuing its journey to network dominance, particularly in North America, where it represents 49.2% of peak period fixed access traffic. If this rate of growth is sustained, Real-Time Entertainment will make up 55-60% of traffic by the end of the year.
• The continued growth of Real-Time Entertainment enables a seemingly contradictory conclusion: P2P Filesharing is here to stay, at least for the immediate future, as evidenced by the marginal drop in share from 19.2% of peak period traffic in Fall 2010 to 18.8% in Spring 2011.
• The composition of upstream traffic on Latin America’s mobile networks has changed dramatically since the previous study. P2P Filesharing has supplanted Real-Time Entertainment to become the largest consumer of upstream capacity, accounting for 46.4% of uploaded bytes.
• Europe’s networks reflect rapidly shifting user preferences. Levels of P2P Filesharing and Web Browsing traffic have changed dramatically since 2009, with no consistent trend appearing. Nevertheless, an important exception in this dynamic market is the Real-Time Entertainment category, which continues to grow steadily.

Related Bloomberg article: “Netflix Offers Streaming Movies on Google Android Phones” (5/12/11)

YouTube is going Hollywood with its new streaming VOD service that may provide some competition to services from the likes of iTunes, Hulu and Netflix. YouTube Movies now offers current mainstream features in addition to trailers, reviews, alternate endings, behind-the-scenes specials, cast interviews, and other extras. (You can browse current titles and check out the interface at the YouTube Movies page.)

This may prove to be a big move for Google (YouTube’s parent company), which no doubt hopes consumers will use Google TV (with updated Android 3.1 this summer) to stream rented movies. YouTube has been renting and offering movies for free with ads for more than a year, but the titles have been less than current.

According to the FAQ section of the company’s press release, YouTube has added approximately 3,000 new titles, “including catalog and new releases from Sony Pictures, Warner Bros, NBC Universal, Lionsgate Films and many great independent studios. This brings the total number of movie titles available to rent on YouTube to over 6,000.”

Viewers will have 30 days to begin watching a rental and, in most cases, will have up to 24 hours to complete viewing.

Engadget reports: “The pricing is $2.99/$3.99 for movies viewable via PC or Google TV (no other device support is mentioned) and the FAQ notes that YouTube supports resolutions up to 4K but ‘most’ of the new additions are sadly in SD, a choice which is apparently up to its partners.”

YouTube is betting that consumers are ready for a change in their viewing habits. Head of YouTube, Salar Kamangar writes on the company’s blog: “You’re finding more and more of the content you love on YouTube, which is now available on 350 million devices. We know this because you’re watching videos to the tune of 2 billion views a day. But you’re spending just 15 minutes a day on YouTube, and spending five hours a day watching TV. As the lines between online and offline continue to blur, we think that’s going to change.”

Related Engadget post (including YouTube press release and FAQ): “YouTube adds 3,000 movies for rental from Universal, Sony, Warner Bros.” (5/9/11)

Related article from TheWrap: “YouTube Finally Goes Hollywood With New Movies on Demand Service” (4/25/11)

Related article from TheWrap: “Mark Cuban: YouTube Can Change the World, But It Can’t Make Money Streaming” (4/14/11)

The nation’s No.1 and No. 2 satellite TV providers may be looking for new ways to provide movies to consumers. Dish Network (No. 2) recently purchased the assets of bankrupt Blockbuster for $320 million and may use the company’s online streaming service to take on video rental enterprises such as Netflix.

Meanwhile, DirecTV (No.1) is reportedly in talks with Hollywood studios regarding a new movie rental service that would provide $30 rentals just two months after films’ theatrical releases. Studios that are looking to combat slumping DVD sales believe that some consumers, especially families, may be willing to pay the higher fee for access to titles prior to their availability on DVD or from services such as Netflix.

Analysts explain that movie studios are open to new online streaming or pay-per-view models in order to recoup revenue from declining DVD purchases. We may also see $30 premium movie-on-demand offerings from cable firms such as Comcast and Time Warner Cable.

Related TVPredictions.com post: “DirecTV to Offer $30 VOD Next Week?” (4/15/11)

Related Engadget post: “DirecTV, Comcast, Vudu could start offering premium VOD $30 movie rentals in April” (3/31/11)

The New York Times offers an interesting perspective regarding how digital technologies have impacted the production, distribution, marketing and exhibition of contemporary movies. The article addresses a compelling focus in terms of how the communal aspect of viewing film is facing a dramatic cultural shift and how filmgoing has become less of a group experience. Have we reached a new milestone that may require us to redefine the term “cinema” — and, if so, what does this mean for the business of filmmaking?

The article cites the fact that theater attendance has declined in the U.S. from 90 million a week in 1948 to approximately 23 million today. Of course, the 1948 audience did not have Blu-ray, on-demand, cable movie channels, streaming services and an array of new technologies that enable today’s “24-hour movie.”

Technological innovation has led to cultural evolution regarding the traditional cinema experience. For many consumers, experiencing a movie is no longer about the anticipation of a release, the social environment created by sitting in a darkened theater with a date or a friend (and a group of strangers), or the “communal laughter, tears, gasps and heckling that become part of our memories.” For many (perhaps most), the experience is now more about clicking a button — and what has become a more personalized, immediate dynamic based on consumption-on-demand that technologies enable.

If the 24-hour movie continues to impact the demands and expectations of the movie-viewing public, will this require us to rethink how we produce, exhibit and market our content?