Why Netflix is reducing the quality of video streaming

Streaming services are capping video quality, as COVID-19 highlights the politics of bandwidth.
1 April 2020

Netflix, like many other companies, must adapt to the current crisis. Source: AFP

Consumers want more control over their media consumption, and tech companies like Apple want in on this high-growth category. 

The so-called ‘streaming wars’ have begun. It’s a bit of a misnomer. In the long-term, consumer demand will likely support the existence of multiple, well-constructed OTT media services. 

Right now, a global pandemic has disrupted the entertainment industry and increased the demand for internet bandwidth.

Film and TV productions have been shut down in order to prevent the spread of the deadly virus among crew and cast members. Cultural icons like Tom Hanks and Idris Elba have already fallen ill. Content creators, distributors, and agencies have undergone layoffs and salary cuts. Even completed content has uncertain release dates. Indoor movie theaters are closed. Digital releases may not result in the gross required to break even.

In this new, chaotic environment, digital content delivery also raises issues of technology ethics. 

Bandwidth politics

Even in ordinary times, high-quality video consumes limited bandwidth. Some of those infrastructure constraints will fundamentally change as more 5G spectrum is commercialized, as spectral efficiency is maximized, and as entirely new edge computing technologies are introduced. But for now, we are where we are.

This has placed Netflix at the center of the fight for net neutrality. Some ISPs want streaming services to pay a toll because of their usage. On its website for investors, Netflix expressed the flip side of that argument: “We don’t intend to try to collect a percentage of broadband revenue from ISPs, despite the fact that we are a substantial portion of what consumers do with their internet connection, and that this payment would parallel the payments to basic cable networks.”

The site also notes that the company offers an “Open Connect” program, which allows ISPs to directly and freely interconnect with Netflix’s network in regional locations, rather than going through third-party transit providers. This lowers the costs for both parties.

In 2017, net neutrality became a particularly heated political conflict and diverse religious leaders weighed in on the topic through an open letter. The moral and technical implications of net neutrality remain unchanged. But there is now an acknowledgement that bandwidth is, necessarily or unnecessarily, a scarce resource during this time of severe crisis and rapid, major adaptation.

Online media consumption has gone up dramatically, which isn’t surprising given the millions of people who are currently quarantined at home. Some of them don’t know what to do and they’re longing for escape. But society needs to prioritize all of its resources. Netflix and other media providers are capping video quality to preserve bandwidth for more critical functions and new remote work arrangements.

The fact that Netflix is willing to remove its highest bandwidth streams says something about the exceptional nature of these times. Some of the companies that are new to streaming have initially stumbled as the result of traffic surges, coding errors, and unfamiliar, technical complexity. 

But Netflix takes pride in its robust, scalable, cloud-native technology and its status as a data-driven company. They have built a massive suite of well-integrated, incredibly sophisticated tools that can slice and dice data across various dimensions, detect anomalies, test systems for resilience, personalize content, and optimize streaming.

Netflix has been reticent about disclosing content-specific viewership data or “ratings” because they originally wanted to keep the focus on the narrative form. 

However, the company has been atypically transparent about some of the innovations from its product engineers. The company’s GitHub and dedicated tech blog demonstrate a commitment to the open-source movement. Perhaps they’re simply trying to attract the very best tech talent by showcasing the corporate culture and potential colleagues.

Either way, the company clearly values the technological components that are integral to large-scale, on-demand media delivery. They know that high quality and reliability lead to greater acquisition and retention. They know about the politics of bandwidth. And they also know that we’re currently living through challenging, unprecedented times. 

It’s all hands on deck. Some compromises must be made for the greater good.