The surging demand for video may prompt broadband providers to work together to avoid congestion problems that slow down the speed of using the internet at peak times.
TrueNet, which measures broadband speeds, says 7pm is causing headaches for Internet Service Providers because more and more people download data-heavy content, mainly television shows and films from overseas.
It says Vodafone and TelstraClear suffered more network congestion than their competitors, calculating Vodafone's speed dropped to 75% of its peak while TelstraClear's declined to about 85%.
Telecommunications Users Association chief executive Paul Brislen says ISPs need to get smarter to fix the issue, and consider using content distribution networks which download overseas content and store it on servers in New Zealand.
He says ISPs will potentially have to work together to maximise their use, for example, of Orcon's content distribution network.
But Mr Brislen says the business model that allows the development of video-on-demand is being stymied by dominant players, like Sky Television Network, which controls most content rights and limits how people can receive what they'd like to watch.
He says content rights currently tend to be tied up with terrestrial or pay TV providers, rather than being freed up for a service like US based Netflix to deliver.
"Netflix in the US costs about $US8 per month for unlimited watching of any kind of television show you can imagine".
Mr Brislen says when that's compared to a more expensive pay TV channel in New Zealand, which may or may not have the content that's wanted, it becomes clear that the business model has shifted and New Zealand needs to shift with it.
The Commerce Commission is carrying out a high speed broadband demand side study, which will consider the incentives to take up fast broadband, the services that may be available and the problems that may arise.
