Way back in 1997 an American chap named Reed Hastings sold his computer software business for a cool $US700 million, and put $US2.5 million of that into a new startup, a DVD rental mail-order business. Initially it ran along per unit rental lines, but was soon switched to a subscription model, eliminating late fees. Unlike other DVD retail outlets, a few years later the company eased over to a streaming model for content distribution, and so continued to grow even as DVD rentals plummeted.
And since 2013, Netflix has moved into actual content production in a huge way, reportedly releasing 126 original films and TV series last year.
Over the weekend Hastings gave his thoughts about the future of movie and TV streaming, particularly in a mobile context, in an interview during the Mobile World Congress 2017.
Not surprisingly he talks up Netflix’s role in content development, especially the international nature of some of Netflix’s own shows, such as “Narcos”, and the provision of other video from other producers. Netflix is, he says, “very passionate about collecting the world’s best content”. With a subscriber base approaching, he says, one hundred million, half outside the United States, Netflix seems to be pretty successful on that front.
But most of the talk was about the future, and particularly the mobile future. As he notes, “ten or twenty years from now, all the video you view is going to be on the Internet”.
Hastings says that Netflix is investing “very heavily, at many levels” on network infrastructure around the world, and dwelt on the codecs in particular. Codecs are the compression/decompression schemes that allow video to be reduced to manageable data rates (uncompressed video would require bandwidths three orders of magnitude greater than presently available).
He says the improvement in codecs is aimed in part at making sure the experience on “mobile, on laptop, on TV, is just instant”. He notes that Netflix has invested in codecs that allow “incredible quality on a four or five inch screen” with bitrates of half a megabit per second. He says that they’re now down to 300kbps and that Netflix is hoping to some day get to 200kbps “for an amazing picture”.
“Five or ten years from now, the quality of Netflix on all of your devices will be just incredible.”
For a sense of what those figures mean, I’d note that DVDs typically run their video at between 3000kbps and 6000kbps, while full HD Blu-ray goes to around 15,000kbps to 35,000kbps. Getting those bit rates down so low is pretty impressive.
Here’s a three minute edited version of the interview: