Online Movies Luring Viewers Away from Primetime TV

Services allowing North Americans to watch movies and television shows over the Internet is luring droves of viewers away from primetime television, a report showed Wednesday.

Waterloo, Ontario-based Sandvine said such online streaming has risen dramatically over the past year to become the top network traffic in North America during the peak period of 7:00 pm to 9:00 pm.

What it calls real-time entertainment now accounts for 60 percent of all Internet traffic in the evening, up 10 percentage points from last year, according to the data it has aggregated from network service providers.

The majority of real-time entertainment (55 percent) is destined for game consoles, set-top boxes, smart TVs and mobile devices used at home, while only 45 percent goes to desktop and laptop computers, according to the report.

The trend risks creating problems in handling data surges during peak periods for networks, Sandvine warned.

Canadian Internet service providers have been cautioned against bandwidth throttling -- limiting uploads -- as this violates Canadian net neutrality guidelines.

So Sandvine suggested they start charging premiums for primetime downloads.

The report explained that game consoles such as Sony's Playstation and Microsoft XBox are powering this online movie watching phenomenon, through manufacturers partnering with content producers.

Microsoft, for instance, announced this month a massive expansion of content providers for its Xbox 360, including heavyweights Bravo, Comcast, HBO, BBC, Telefonica and Rogers on Demand.

Also, "when subscribers watching online video are free to choose between screens, they generally choose to watch content on the largest screen available to them," the report noted.

A TV offers a better viewing experience than a computer, but a larger screen size also means higher data usage. For example, when watching a video on a 60-inch high definition plasma screen, most subscribers will opt for the highest video fidelity available.

According to Sandvine's report, the most popular real-time entertainment sites include Netflix, YouTube, Hulu and Google Video.