Podcast: Play in new window | Download

The Intertubes are alight this week with old news — that Netflix is the largest user of U.S. Internet bandwidth. Most stories cite a Sandvine report I won’t link to because you’d have to subscribe and I like you too much for that. Better still, look at the very interesting graphic above, courtesy of Arbor Networks. This chart has been floating around the net for a couple of months and shows the result of an Arbor study of several U.S. ISPs illustrating how we Americans spend our Internet bandwidth. There are three lessons I think we can learn from this chart: 1) that BitTorrent is no longer (or perhaps never was) the threat were were told by ISPs; 2) that video is by far the Big Kahuna of bandwidth, and: 3) that Netflix may be approaching the point where it is too big to fail.

First a look at BitTorrent, which ISPs love to complain about. Torrents are down to only eight percent of Internet traffic, but much more important is the fact that torrents have always been more polite than video streams. Here are two more graphs courtesy of Arbor Networks. First take a look at how web traffic varies over a typical 24 hour period: Now look at p2p traffic over the same period:The two are reciprocals of each other. This is by design, not coincidence. The nature of BitTorrent is to grab bandwidth not utilized by other services. So when web surfing declines in the late night and early morning hours BitTorrent increases.

Using only eight percent of Internet bandwidth and substantially less than that during peak hours, I think BitTorrent’s day as the Internet bogeyman are past, though I doubt the MPAA will see it that way.

Even more interesting is the rise of Internet video. Back in 2005 when iTunes users were downloading seven million three-minute music videos, readers of this column were downloading 2.5 million hours of NerdTV. I remember those downloads cost me $0.25 per gigabyte — ouch! In 2010 Netflix spent about $0.015 per gigabyte with an average 1.8-gigabyte movie download costing 2.7 cents to stream. Compare this to the average $1.00 Netflix spends to ship and receive every DVD and you can see their current business transformation from DVDs to streaming will lead to dramatically lower costs, freeing-up capital to buy more content.  It’s a virtuous cycle that Netflix (and all it’s competitors to be sure) will attempt to leverage into its own form of too big to fail.

None of this is big news, I suppose, but think for a moment about the implications it has for both future services and for the commercial value of the Internet. Streaming costs are going down, not up, so what’s cheap today will be cheaper still tomorrow. These lower costs will allow higher quality (1080p video, for example) and they’ll shortly reach the point where stream costs will be lower than over-the-air broadcast costs on a per-viewer basis, which in the longer run is an inevitable prescription for the death of broadcast TV. It’s not a matter of if but when this will happen.

Even Luddites will be sucked into the Internet age if they want to communicate.

Despite having spent billions to help along the recent digital TV conversion, I’m sure the Federal Communications Commission will be happy to see broadcast TV disappear since it will do so with a flurry of spectrum auctions bringing-in many more billions to the Treasury. And that freed-up spectrum will go into more data services as we move toward the all-IP all the time future for carriers I have long predicted.

As for Netflix, it is hard to bet against the company. Hollywood studios glower and hint that Netflix will be deprived of content as current content deals — specifically Starz — expire, but that won’t happen. Dropping DVDs completely would transfer $2 billion straight to Netflix’s content acquisition budget through a combination of an increased subscriber base at lower prices and no more postal fees.

That $2 billion will buy a heck of a lot of crow in Hollywood, where cash is king.

Podcast: Play in new window | Download

I have a mouse in my RV.  Or as many correspondents have told me I have MICE in my RV, because the concept of a solitary mouse is beyond their considerable experience.  This month my wife, three young sons and I (and of course the mice) are in California, mainly touring in our 1996 Winnebago.  We tour, we fix, then tour some more. The old Winnie was never built for 107-degree desert temperatures and neither was I.  So since we’re broken-down waiting (again) for the fixit man to come, I think this might be a good time to update my readers on a few old projects.

But first let me say that in an RV that has both Verizon and AT&T wireless data service, in California at least, Verizon is better — substantially better.  More bars in more places, indeed!

1) Whatever happened to NerdTV?  We made a season for PBS back in 2005-2006 then shot a second season in 2007 that was never aired because of pesky ownership issues and people still wanting to be paid.  The show itself has morphed a bit and will reappear with a new name and an exciting new weekly format this fall as a co-production with the Computer History Museum in Mountain View, California.  It will be available for streaming online and may appear in some form on television, too, possibly even with PBS.  Look for an announcement on this soon.  And if your big-to-bigger company wants to sponsor the first season (36 shows!) let’s talk. But I’ll warn you this is a professional production that isn’t cheap to make and we’d prefer a single sponsor.  Still, as the old shows continue to show, the content ought to be timeless.

2) And what happened to Bob’s disk drive project with its stainless steel foil platters?  The idea, remember, was to dramatically reduce the rotating mass with several attendant advantages: 1) lower cost; 2) dramatically lower power; 3) higher performance, and; 4) greater shock resistance.  An iPod with this new type of drive ought to easily run 3-4 times longer on the same battery.  A data center could see storage-related power consumption decrease by up to 85 percent.

Yeah, but what happened?

It took time to develop the stainless steel foil, itself.  Most of the other parts come straight from any disk drive maker’s parts bin but the foil required lots and lots of R&D which was done primarily for nothing — no money — which means it took longer than we would have liked.  But that work is now pretty much complete, the foil is indeed smoother-than-smooth, and a pilot production plant is being built in Japan thanks to the recent entry of a Silicon Valley investor whose name you would recognize.  Look for licensed products to appear starting in 2010.  Interestingly improvements in flash drive technology haven’t particularly hurt the market opportunity, either, since the foil is WAY cheaper and video applications are driving mobile storage requirements up faster than flash prices are coming down.

3) Finally, whatever happened to my plan to land rovers on the Moon?  Am I ambitious or what?

The Moon project, which was originally intended to vie for the $20 million Google Lunar X-Prize, has been moving forward slowly but quietly.  It’s a little harder to do, you see, when there isn’t a $20 million payday at the end, but it became quickly clear to us that there is unlikely to be any winner of that Google prize in the five years ending in 2012 as the contest is currently structured.

Team Cringely, on the other hand, still expects to reach the Moon by 2011 and will by fall have a number of announcements on that front including major technical alliances, major corporate sponsorships, and a global TV deal.  And this is no stunt: we’re working with NASA’s Goddard Space Center to answer a long list of important scientific questions until we use-up our 24th and last rover.

So it’s a busy summer, but mainly we’re wondering now if the 107-degree heat will drive out those mice?