Netflix recently two major changes to how it streams video to customers. First, Netflix video streams are more efficient and require less bandwidth. Second, Netflix is now offering a new higher quality 1080P video stream called “Super HD”.
When the more efficient video streams appeared, it allowed for the delivery of 1080P video to households with slower Internet connections. However, Netflix removed its highest bitrate video stream (X-High). Some customers thought the more compressed video didn’t look as good and appeared “soft”.
“Super HD” is the highest quality 1080P video Netflix has made available to its customers (unfortunately, I have not seen it myself yet as I’m on FIOS). Specifically, Super HD can stream as high as 5800 Kbps versus the previous X-High stream at 4800 Kbps. However, most US Netflix customers don’t have access to “Super HD”. In order to receive “Super HD”, your Internet Service Provider (ISP) must be part of Netflix’s Open Connect program. Netflix doesn’t charge a fee for an ISP to join. However, the ISP must make an investment in
server equipment and labor to participate in the program. The equipment is used to cache Netflix’s content at the ISP so it can be streamed to your home more efficiently (and avoiding lots of hops through the Internet).
By the way, it appears most of the current 1080P Netflix devices can also stream in Super HD (it’s unclear if the TiVo or the WD TV Live can). With this annoucement, Netflix also added 3D support, but the device support is much more limited.
Why would Netflix limit Super HD only to ISPs participating in their Open Connect program? VUDU streams video at higher bit rates than Netflix without this restriction. However as an a la carte service, VUDU probably streams less hours (and bits) of content to viewers. I believe Netflix has imposed the Open Connect requirement since it’s thinking two steps ahead. With more HD content and high bitrates, perhaps Netflix thought it was going to encounter further push back from ISPs. In fact, almost 65% of US consumers are subject to bandwidth limits by their Internet Service providers. The higher quality streams could result in more customers hitting their bandwidth limit.
What we have here is another chapter in the Net Neutrality battle. Net Neutrality is the principle that all data should be treated equally. ISPs should not give preferential treatment to their own services or discriminate against particular applications, website or content providers. For many consumers, their Internet Service Provider is also their provider for cable TV and telephone services. Services such as Netflix threaten the revenue of cable companies. Services such as Netflix have made it easier for consumers to cancel their cable services, threatening the cable companies’ revenue.
Furthermore, major ISPs such as Verizon FIOS and Comcast have another disincentive to be part of Netflix’s Open Connect program. Both providers have their own streaming video services that compete with Netflix (Streampix and Redbox Instant). On the other hand, ISPs without their own all-you-can-view service including Cablevision and Google Fiber have joined Netflix’s Open Connect program. You can check here if your provider is a member of Open Connect.
From a technical point of view, Netflix has the right approach. Having it’s own content distribution network (CDN) and allowing ISPs to cache their video is the right way to do it. It will make the Netflix service more scalable with the ability to serve more customers with higher quality video. It addresses a concern of ISPs where carrying Netflix traffic can result in significant costs. However, most customers are not enjoying this technically sound solution.
This feels like another instance where Netflix has a lot of good reasons to do something but forgot about the most important one, the customer. Right now, most customers have lost access to the highest quality 1080P video available from Netflix. In its place, customers have to ask their ISP to join Open Connect. Placing the burden on the customer isn’t the best approach. It would have been better if Netflix made Super HD available to all customers. While some ISPs may have attempted to throttle back Netflix traffic, they would then be the bad guys (or maybe they wouldn’t do anything). Maybe Netflix customers should complain to Netflix instead.
Update: Multichannel News is reporting that while Time Warner Cable is considering joining Open Connect, they object to Netflix holding back the highest quality streams from non-Open Connect ISPs.