Netflix accounts for over a third of Internet traffic during peak hours in North America. That's more than its major competitors combined, a fact the streaming media giant is no doubt proud of. It's why any changes to its formula - like the one it has been working on for the past four years - is such a risky endeavor.
As Variety explains, Netflix used to prepare its video files for streaming based on assumed connection speeds. By that, I mean it would have multiple copies of each file for varying connection speeds and send out the appropriate quality based on available end-user bandwidth.
This method, of course, was flawed.
Netflix realized that you shouldn't allocate the same amount of bits for every show and movie. An animated cartoon like My Little Pony doesn't require much data to produce - far less than, say, a movie like Avengers. Simply put, a one-size-fits-all model doesn't work. Heck, even categorizing titles (action movies, slow dramas, etc.) is too general.
The solution was that each title should get its own set of encoding "rules." And not just each series, but each individual episode in a series.
The end result is that Netflix is able to deliver a better quality stream that consumes up to 20 percent less bandwidth. Considering how ISPs like Comcast are cracking down on bandwidth usage, any savings will be greatly appreciated.
Netflix said it tested the new streams internally; its own employees couldn't spot the difference between new and old streams. Variety also sampled the streams, noting that both looked virtually identical even though one was streaming at 5800kbps and the other was at 4640kbps.
Netflix quietly added a small sample of "new" videos to its catalog earlier this month with plans to replace its full catalog by the end of Q1 2016.
https://www.techspot.com/news/63154-netflix-re-encoding-entire-catalog-boost-quality-reduce.html
