Netflix deal paves way for bandwith revenue here
EIRCOM and its competitors are breathing a sigh of relief amid signs they might finally make some money from the growing popularity of Neflix.
A new deal signed in the US could see online film bank Netflix begin paying internet providers around the world to deliver its service.
Internet providers like Eircom are under increasing pressure from consumers to upgrade their services so that consumers can watch movies online using their Netflix accounts – even though only Netflix benefits monetarily, through its subscription model.
Netflix has seen its popularity soar in recent years. Figures released last August showed its Irish subscriber base now exceeds 150,000.
In the US, Netflix now generates about 30pc of the country's internet traffic during peak-viewing times.
This has resulted in a huge jump in bandwith demand on both sides of the Atlantic, sources said. Netflix, which streamed more than two billion hours of content in January, even plans to begin adding bandwidth-intensive ultra high-definition content later this year.
But this week, Netflix announced a landmark deal with one of the largest internet providers in the US, Comcast. It has agreed to pay Comcast to ensure faster streaming speeds for customers.
Experts are now speculating that Netflix could be forced to strike similar arrangements, known in the industry as interconnect agreements, with other US broadband providers – meaning Eircom, Sky and others are paying close attention.
"The deal confirms that if you're a video company that wants to get your stuff from point A to point B through a broadband pipe, you have to pay a tariff," said Michael Pachter, an LA-based technology analyst.