Late last night, Netflix took to their blog to announce that users in Canada now have the ability to reduce the quality of Netflix's video streams in an effort to combat the bandwidth caps from Canadian ISPs. Netflix streaming in Canada will now default to a 625Kbps video stream for what Netflix calls the "good" setting. Selecting "better," users will get a maximum 1300Kbps video stream and customers who select the "best" quality video setting will get up to 4800Kbps.
It was about a year ago that Netflix stated that ISP caps would not impact their business, yet here they are having to reduce the quality of the users experience due to ISPs. It also interesting to note that Netflix is now using the lowest quality video setting as default, meaning many users who don't know they can increase the quality of the video are going to question why it looks so poor. No matter how Netflix spins it, caps are going to have a negative impact on their business and it's no wonder that so far, Netflix does not allow most of the streaming boxes that work in the U.S to stream in Canada. Trying to watch a video encoded at 625Kbps from a box that is hooked up to a 42" TV will look horrible.
For the past fifteen years the entire streaming media industry has been talking about ways to improve video quality and creating a better user experience and now Netflix has to reduce the quality of their video in Canada, due to something they can't control. This is simply bad news for everyone involved and if caps get lowered in the U.S. or ISPs start enforcing them, our video experience as consumers will get worse, not better. This is a step backwards and we have many of the ISPs to thank for this who are complaining about all of the video traffic on their networks, yet in reality, are simply trying to cash in on it.