Netflix Feeling The Pressure From ISP Caps, Reduces Streaming Video Quality In Canada

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.

  • @Dan – Agreed, this is spooky being an American with Canadian in-laws – aside from the weather, Bell and Rogers (nicknamed “Robbers”) represent the next biggest complaint among our northern friends. The big ISPs are really are screwing their customers – $100+ for 10Mbps internet. The silver lining is that there are smaller ISPs reselling Internet, like Teksavvy, popping up with 300GB/month caps for less than Rogers’ 60GB/month. Hopefully that will gain traction and get customers out of the ditch. To your point though, some lame ducks will see this as a Netflix problem first, and a systemic bandwidth problem second. Knowing how good Netflix is about customer service, they are probably hard at work on a PR campaign and working with the smaller ISPs to get around the big business bottlenecks.
    P.S. looking forward to Streaming-East.

  • Ultramog

    My Netflix over AppleTV via Comcast in north Jersey QoS has plummeted over the last 2 weeks. Lousy quality, lots of buffering. My net throughput is high at 14mpbs. I called Comcast and the help had not heard of Netflix streaming (!) He asked if I was doing a “lot of movie downloading.” Is Comcast capping me in NJ?

  • Deborah

    Good post information. Thanks. Issue coming around again even hotter, hoping that Netflix allows US customers the same. I have AT&T DSL, and no options, and do not even get over air (except PBS), so I eat up my CAP 20 days into the month, and they just started charging me ($20 extra a month it appears). I know I use alot, I’m disabled and work from home – so I stream more than most. But I really need Netflix to consider the US plight as being much the same as the Canadians – and hope they offer us this option soon. Thanks again for the article.

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