From his vantage point at iiNet, Australia’s second biggest DSL internet service provider (ISP), Dioguardi has seen the country’s appetite for streaming video begin to grow, and fast.
In March 2015, after launching in Australia, Netflix made up 3% of iiNet’s network traffic. Just under four weeks later it’s at 25%, according to numbers Dioguardi shared at the CommsDay Summit in Sydney on Monday.
iiNet wanted to roll out the red carpet for Netflix, Dioguardi said, and people are “just storming down” it.
This Netflix traffic is not substitutional for other activity online, he added. “We’ve seen hardly any change in the absolute volumes of other CDN [content distribution network] storage.”
In addition to the unmetered streaming iiNet offers Netflix customers, Dioguardi said users had a free trial of Netflix for the first month. iiNet is waiting to see if high usage level continue once customers are required to pay for the service.
But given Netflix now accounts for a third of all Internet traffic in the United States, these numbers can be expected to grow. The introduction of the service locally, and its mainstream promotion, has also seen an increase in traffic for competitors in the market, such as Quickflix.
Quickflix said in a press statement, the volume streamed by customers in the March quarter was 34% higher than the previous quarter and the service recorded a 6% increase in paying customers.
The rise in video streaming traffic has been dramatic for the iiNet, but it hasn’t been without hiccups. As Dioguardi put it on Monday, “I don’t think many CTOs in the room have been sleeping too well over the last month dealing with this phenomenal change.”
Dioguardi said that iiNet had been upfront that these first few weeks of Netflix streaming had been occasionally rocky. “We’ve had a few hotspots around the place … but we’ve been very open with our customers,” he said. “We’re very well positioned to deal with the massive growth of streaming services on our network.”
When asked about his view on Netflix’s newfound regret regarding the deals it made with iiNet and Optus to offer customers unmetered streaming, announced in the company’s quarterly earning report last week, Dioguardi said Netflix was making its own comments in the context of the company’s wider international issues, such as net neutrality.
“When it comes to iiNet, we’re only focused what our customers want, so right now we’re continuing on with unmetered [service],” he said.