Netflix (NASDAQ: NFLX) is changing the way it encodes its programming, trimming bandwidth needs by as much as 20 percent.
As outlined by Variety, which was given an in-person demonstration of Netflix's new encoding methodology at the SVOD company's Los Gatos, Calif., facility, Netflix will now adjust the streaming bitrate based not just on the user's bandwidth but also on the type of content being streamed.
Previously, Netflix would downgrade bitrates all the way to 235 Kbps to accommodate slower connections, but the company would still aim to provide a top-shelf stream with 5.8 Mbps bitrate for all programming.
But not all programming needs the same bitrate to look good. While live-action programming has higher requirements, animated shows can be reproduced in quality 1080p resolution with a 1.5 Mbps bitrate.
"You shouldn't allocate the same amount of bits for My Little Pony as for The Avengers," Netflix Video Algorithms Manager Anne Aaron told Variety. She added that Netflix has been working on the new encoding scheme since 2011. The company has been quietly testing the scheme for several months.
Not only does adjusting the bitrate based on content reduce Netflix's bandwidth needs overall, it provides a better experience for users with slow connections. Previously, those who couldn't handle a 5.8 Mbps bitrate would be downgraded to 720p resolution or lower.
For Netflix, the benefits of reducing data usage go beyond improving the user experience. The company currently accounts for around 37 percent of all U.S. Internet traffic, according to the latest Sandvine figures.
With 4K adoption coming down the road, reducing its file sizes will help reduce bottlenecks on the Internet. "We want to be good stewards of the Internet," Aaron told Variety.
Of course, reducing its data load will also help Netflix be less dependent on ISPs, which have sought to monetize Netflix's extensive usage of their networks.
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