Photo: JD Lasica/Flickr
How long until Netflix streaming customers have to keep one eye on the bandwidth meter while they’re watching a movie?Netflix just rolled out a new streaming system in Canada to help its customers deal with bandwidth consumption, as caps and overage charges are more common there than they are in the States.
Sooner or later, that could be an issue here, too, as Internet providers eventually hope to move to a consumption-based billing model. Especially as streaming video services like Netflix increasingly compete with the cable and telecom companies’ cash-cow TV services.
Netflix, as usual, seems to have done a nice job implementing the system and explaining it. Each Netflix Canada account can now manage “video quality” settings, with a “good, better, best” model. Netflix product boss Neil Hunt also included technical details about the streams for those who want it.
Hunt says the new streaming system will use 2/3 less data on average, “with minimal impact to video quality.”
At this point, these sorts of issues aren’t widespread here, and shouldn’t have a negative effect on Netflix’s U.S. business. But as all-you-can-eat Internet access eventually goes away, that could potentially be a bad long-term trend for Netflix. At very least, it will force the company to investigate better ways to compress video and refine its distribution platform, as it just did in Canada.
Netflix CEO Reed Hastings even said as much earlier this year in a section of Netflix’s Q4 investor update:
“An independent negative issue for Netflix and other Internet video providers would be a move by wired ISPs to shift consumers to pay-per-gigabyte models instead of the current unlimited-up-to-a-large-cap approach,” he said. “We hope this doesn’t happen, and will do what we can to promote the unlimited-up-to-a large-cap model.”
But it’s starting. AT&T, for instance, recently announced a 150 GB monthly cap for its ISP customers, significantly below Comcast’s 250 GB cap.
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