Very interesting report that Netflix now accounts for 33% of the residential downstream peak traffic in North America. Nobody else is even close.
I speculated that one of the reasons that Verizon may have started the joint venture with Redbox was to insure that whenever possible the Redbox Instant traffic would be traveling on Verizon pipes. What would 33% of the peak residential traffic in North America be worth to Verizon? Would wrapping up that traffic and the revenue that it entails be worth a little north of $4 billion (what it would probably take to buy Netflix)?
I've seen a lot of articles talking about who would be interested in actually buying Netflix and all of them name the same usual suspects - Amazon, Verizon, Google, AT&T but I think there could be others for whom the purchase might make more sense.
Think of a company like Level 3 Communications. They could buy Neflix and tell Reed Hastings to just keep running the company as he has done with one little stipulation - all traffic on Level 3 pipes whenever possible. In turn Level 3 could increase Netflix's profitability just by making network usage more efficient.
Or think of a company like Akamai. They could also drive profits by making Netflix's network usage more efficient while at the same time using Netflix's traffic to get better deals for existing CDN business. It would be a very bold move by Akamai but it very well could be worth it.
If Netflix does get purchased - I'm guessing it won't be by one of the usual suspects (except maybe Verizon).
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