Netflix aims to become 4K video leader, ditch 3D

Peter Nowak on the company’s next big move

There are a lot of reasons why Netflix is one of the most interesting technology concerns going today. As a company that essentially sells people digital access to movies and TV shows, it has huge potential appeal worldwide since just about everyone watches movies or TV shows. With 40 million streaming subscribers in more than 40 countries so far—the Netherlands was just added in September—the service is growing in clout and exerting more influence on every aspect of the visual entertainment medium, from production and distribution to content and viewing patterns.

I had a chance to sit down with Netflix’s chief product officer, Neil Hunt, for a lengthy chat on Thursday, wherein we covered some upcoming improvements to the service—which I’m not allowed to talk about just yet—as well as a range of broader topics, from the future of television to the fate of HBO, which I am able to write about.

First on the docket was 4K, or ultra high-definition television, which manufacturers such as Sony and Samsung are starting to push in a big way. Weary industry watchers might be inclined to dismiss 4K/UHD—which features four times the resolution of regular 1080p high definition—as just the latest effort from manufacturers to kickstart flagging TV sales. With 3D having fizzled, it’s on to the next thing.

Hunt and Netflix in general think 4K is the real deal, however, seeing it as a natural evolution of what content producers and consumers alike already use and understand. Aside from pushing more pixels onto the screen, 4K TVs are also offering higher frame rates, meaning they’re able to cram more information into every second of viewing. The realism of video content is thus set to get a lot sharper.

Some good examples will be needed to sell people on the technology, however, which is why Hunt says Netflix is currently shooting the second season of House of Cards in 4K. The company is looking to add the higher-resolution content to its offerings in the first half of 2014.

Hunt believes Netflix can be the source of 4K content, since people won’t necessarily want to buy new devices to play discs or upgrade their libraries to another new format. “It seems to me that this time it’s internet delivery,” he says. “We [internet video] are often perceived as the last game in town, the scratchy video in 380p, but here we can really leapfrog to the front. I’d like to win a technical Emmy for delivery.”

On the other hand, Netflix is taking the opposite tack to 3D, which it announced on a test basis in the United States earlier this year. That feature has proven to be unpopular with subscribers, mainly because people don’t want to wear glasses at home. The situation is different in movie theatres, since the glasses are part of that special experience, but it doesn’t necessarily translate well into home viewing.

“We’re probably looking to back out of it in the end. I’m not sure there’s enough value in it.” Hunt says. “We’ve got a small collection and we’ll keep that going but we’re certainly not looking to expand it.”

4K streaming will prove taxing on broadband networks, especially in Canada where usage caps are comparatively low to the rest of the world: Netflix’s chief content officer Ted Sarandos has said the restrictions are “almost a human rights violation.” Streaming ultra HD will likely require a dedicated connection of about 15 megabits per second, which translates into about 7 gigabytes of usage per hour. With most Canadians on caps of about 60 to 70 GB, they’ll chew through that in no time and will have to divide up their consumption of the 13-episode second season of House of Cards, which is a problem for Netflix subscribers who like to binge watch.

Despite that, Hunt is upbeat about data caps in general—his own U.S. provider recently upped his 250 GB limit to 300 GB. With caps moving in the right direction, that should give networks some time to adjust to what will at first be a trickle of 4K content.

“It’s not like we go overnight from no 4K to everything 4K,” he says.

Hunt, who is originally from the U.K., and Netflix chief executive Reed Hastings first met at the Schlumberger research lab in Palo Alto back in 1985. They went their separate ways, but in 1991, Hastings recruited the hardware and software engineer—Hunt has a PhD in computer vision—to work at Pure Software. It was a “geek squared” company in that it created software tools for software developers. Pure was eventually acquired and is now part of IBM, and Hastings went off to start Netflix, which began as an Internet company specializing in mailing out DVDs.

Hunt came on board two years later, in 1999, and the duo eventually began transforming the company into mainly a streaming provider. In both cases, they preferred working on a consumer-facing product rather than business-to-business, mainly because they got to avoid the phenomenon of “HIPPO” – or the highest paid person’s opinion, which inevitably wins out in enterprise situations. With Netflix, they found they were entirely governed by the tastes of their customers.

One great example was the “queue,” a word and concept that Hunt may very well be responsible for introducing to the North American vernacular through Netflix. When the company first started out, the idea made sense— customers could select the DVDs they wanted to watch and literally line them up for mailing. It didn’t necessarily translate in the move to streaming, largely thanks to what Hunt calls the “virtue movies,” or the films that everyone knew they should watch, but never did end up actually watching.

“We naively migrated the queue concept to the streaming business, but in testing we found it quite negative,” he says. “Customers fill it with stuff they want to watch, but never watch tonight. And then it’s right there at the top of the page.”

The “canonical” example he uses is Schindler’s List, an excellent-but-extremely-serious Best Picture winner about the Holocaust. Many users would add it to their queue, at which point it would always show up at the top of their page when they opened Netflix.

“Every time you sit down, it’s a Holocaust tragedy right in front of you. What a downer,” he says–not callously, but matter-of-fact. According to data, many users have a 30-second to one-minute “moment of truth” in which they look for things to watch, and if they don’t find something appealing, they move on to doing something else. The “baggage-filled” queue, it turns out, was turning people off using Netflix.

When the service launched in Canada, executives decided to omit the feature, much to the chagrin of Canadian subscribers. But, if the data showed anything, it’s that Canadian viewers were better off for it.

The solution, which launched this past August, is “the list,” which is similar to the queue except that it replaces those “virtue movies” on the home screen with options selected by Netflix’s predictive algorithms. The heavy stuff is still there, just out of sight and out of mind, with content people might really want to watch put front and centre.

One of the big, continuing challenges for Hunt’s technology team is to come up with better ways of predicting and recommending to viewers things they might like. I wondered if Amazon, the company’s biggest competitor—at least in the U.S.—might have a leg up, because it has more user data to draw on. The website can, after all, look at books or other goods that customers have bought and suggest movies or TV shows they might like to watch through its Prime service.

Not so, says Hunt, who counts photography among his hobbies. He says he has bought several Nikon cameras through Amazon, yet the website still suggests Canon lenses to him. “They don’t put as much effort into this as we do. If you look at Prime suggestions, they’re way, way further behind than we are,” he says. “We don’t get distracted by not selling Canon lenses to Nikon users.”

Years ago, Amazon also tried to link clothing recommendations to customers’ book purchases, but found the correlations were weak to non-existent. “They realized it was quickly bogus so they changed it to, ‘People who bought Lord of the Rings wear underwear.’ I don’t think Amazon has an advantage on us.”

Looking into the future, Hunt doesn’t see Netflix doing much differently five years from now. The company is focused on four things: “More people, more countries, better quality, better executed.”

But what about this impending TV revolution that everyone is talking about? Here in Canada, the federal government has promised to force TV providers to offer pick-and-pay channels – won’t a-la-carte options shake up the whole business? And what happens when HBO “goes Netflix” and offers up its own streaming service, separate from any cable bundle?

Even though the two services are very alike, Hunt doesn’t see the HBO house of cards—my pun, please excuse it—toppling any time soon, since it still makes billions from its traditional cable deals. “It’s incredibly risky for them to put that multi billion dollars at risk and to build something new from scratch, and it’s very hard for those two business to co-exist. As soon as HBO is $10 on the side, the rest of the revenue and ecosystem starts to collapse,” he says.

“They’re on the wrong side of the river and there’s a deep gorge in between. It’s not impossible to cross but you have to go down a long way before you come up the other side.”




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Netflix aims to become 4K video leader, ditch 3D

  1. I would like to compliment this authors way of writing. I don’t have much experience in the field but I find that in newspapers and magazines most writers seem cocky and like they are trying to be too buddy buddy with you. Although I understand that the buddy buddy thing would maybe draw a connection with the reader and contribute to them feeling more engaged, it gets on my nerves. This author has alot of real content, and then sums it up short and sweetly at the very end. Love your flow, pleasure to read.

  2. Great article, can’t wait to read the follow up piece. I wonder if Netflix will attempt to penetrate the Sports market.

  3. Canadians get screwed with caps. Its all about the media cartels in Canada price fixing and price gouging with CRTC as the ring leader.

    Not only that, the content as of late seems to be the same on all the channels. Movies make the march with pay channels, then other channels and eventually local channels. Not much new content on cable at all.

    Not sure why Netflix offers only 1/3rd the movies to Canadians but it does appear some political censorship bias may be in play. I am sure CRTC is involved in this somehow.

    200+ channels of expensive cable TV and only 8 channels I watch. Have those bundle rigged so the few channels of value drag in all others. But no real competition.

    https://fiber.google.com/about/

    USA is rolling out gigabit to the home with TV included, and we are stuck with last century services, thanks CRTC for nothing. Google is gigabit without caps. 100-200 times faster, less latency.

    Read and weep, the costs of being Canadian….

    https://fiber.google.com/legal/subscriber.html

    Yep, Internet on steroids, cable TV all you can eat for just $120/month. Most Candains can get this service level for $240/mo.

  4. I’d rather have higher quality TV shows, not higher quality TVs. Focus more on good content, less on more pixels please.

  5. hi there 1 4k movie reqiers 400 gb data transfer soo 1 movie over data caps stick with 3d untill we get unlimted data

  6. netflix acts as if the internet is free. they drive more net traffic then most but have no penatly for chewing up all the net space. Time for net flix to start paying a net trariff for every meg of data they use.

    • Netflix doesn’t force anybody to watch anything. They offer the service. If you choose to play, why should they be the ones who pay?

      • They pay for the bandwidth they connect to the internet with and the customer pay for the bandwidth they use. Netflix offers up free cache servers to service providers. How exactly are they not paying for their internet?

        The root issue is that the service providers survive by overcommitting the bandwidth they purchase from their upstream provider. If all their customers begin using all the bandwidth they’ve been sold, their business model doesn’t work anymore. This isn’t due to the customers being greedy and using more than somebody’s idea of what a ‘fair share’ would be.

  7. Hey,
    Just a quick correction to your article. 4k Tv’s are 4 times the amount of pixels and twice the resolution. They run at 2160 rather than 1080. You have it as 4 times the resolution.

    Source: I work at a best buy and have sold several of these guys.

    • Unfortunately you are forgetting the 3840 horizontal pixels. That’s how 3840×2160 is actually 4 times bigger than 1920×1080.
      Source: math and tech demos.

      • Also a 4k tv can display 4 1080p images at the same time, pretty damn handy if you need to keep an eye on several displays worth of data, or if you need to check 4 subreddits at once lol

  8. The funny thing is, any TV that offers a much higher frame rate is a gimmick. Why?
    Commercial television airs at between 28 and 30 frames per second, normally. Movies (with the exception of both Hobbit films) are 24 fps. The only thing that reaches 60 is games, and even then, most console games run at 30, with only PCs hitting anything beyond 60.

    Even funnier, we’re so conditioned that the jerky motion of 24 fps movies is realistic that studies have shown people disregard faster, more lifelike fps levels as “unrealistic” despite it being the opposite.

    So a fancy 240 fps TV isn’t doing anyone anything. The only thing that’s actually going to use such a frame rate is a PC.

  9. Why the hell are they gonna do 4k when they can’t even get me 720p reliably? Just about everything I play starts off at like 240 and if I’m lucky gets up to 720. Most of the time its 480. I have a 50Mbps plan from my ISP so I should have plenty of bandwidth for HD streaming.

    What an idiot company!

    • Your ISP is throttling you or has bad connection quality.

      Nothing to do with Netflix, who already have done all they could to improve data throughput by introducing their Open Connect CDN.

  10. UHD (“4K”) is the new 3D Gimmick.

    First off it’s not even real 4K. Real 4K has 4096 horizontal resolution. But the industry decided not to go with real 4K because HDMI cannot support 4096 at 60fps. DisplayPort can, but only HDMI allows the draconian copy-protection. So for copy-protection reasons, the industry lowered the resolution to 3840-horizontal which means the aspect-ratio will not be true to real 4K. Also, because the “Hollywood” source material is mostly 4K (4096-horizontal) numerous other problems crop up when converting 4096 to 3840.

    Second, bumping the resolution from 1080p makes little sense and will have little impact on viewing quality all by itself. Most people can’t even see all that a 1080p display has to show at normal viewing distances coupled with current panel sizes. Experts agree that a much more noticeable improvement would have been to bump the color space to 4:4:4 and to raise to a 10-bit or 12-bit panel. A 1080p display with 12-bit 4:4:4 panel would deliver a much better picture than a UHD panel at the current 4:2:0 color space with 8-bit panel.

    Netflix increasing the resolution like this when they can’t even deliver 1080p with any consistency is a joke and beyond their capabilities. Broadband just can’t handle it now, at least in the United States. Massive compression algorithims will be needed which just lowers the quality of the video. The whole thing is a marketing gimmick. Viewers should avoid UHD the same way they avoided 3D.

    Then next big thing in TV is OLED. Skip UHD and save up for an OLED, which should be much more affordable in 2015/2016 and on. You will appreciate OLED and actually be getting something for your hard-earned money.

  11. Where did they get their stats on people desirous of watching 3D content? Considering that most of their subscribers can’t get 3d from Netflix even if they have 3D tv’s. I have 2 3D tv’s and 2 3D Blu Ray players with Netflix apps. However they are all 1.5 years old and since the that is considered old by tv manufacture standards, I will never get the new NF app with 3D. So, that means unless you have a new tv or new Blu Ray player you are out of luck for 3D. That also means that only people with new equipment can watch 3D. I would say that leaves the vast majority of viewers out of luck and I know I am not about to spend hard earned $$ to replace perfectly good almost new equipment to watch one providers movies.

  12. 3D is now,4K is still 5-10 years down the road before the average person can afford it.If they ditch 3D content ,we ditch them.

  13. 4K/8K/3D is the future. Netflix has a VERY limited selection of quality 3DHD choices. They seek cheaper content distribution through subscribers. 3D fans buy quality content. The entire market is still in it’s infancy, time & technology continue pushing it forward.

  14. Considering 3D media has never worked for me off of Netflix may also be an issue. Keep trying off PS3, and get error messages. I guess this is Netflix telling me I really don’t want it?

  15. 3d only failed because there wasn’t good enough content to convince people of it. Most movies and TV at the time 3d came out looked more like a popup book than actual 3d. This in my opinion got many people to not like the technology. I’ve seen 3d on my 3ds where the whole face of a character is rendered in 3d so that you can see the depth in the face. I think that is what people were looking for and didn’t get. I hope 3D gets back in the game sometime soon. Untill then I guess 4k is the way to go.

  16. 4k is just as much of a gimmick if not more so than 3d. Unless your standing 2 inches away from a 4k. You wont notice the difference. They Human can only perceive so much. At least if the 3D is good enough its pretty damn noticeable. Unless your missing an eyeball or something.

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