2013-07-23 – London
TV networks and online competitors are left behind
Algorithms might not be the first word you think of when it comes to Netflix, but their use of extremely efficient compression and encryption algorithms is helping cement their place as the market leader of on-demand internet video streaming. Netflix traffic from broadband users in the US accounts for almost a third of the peak downstream internet traffic in the country.
Netflix is using ultra-efficient compression algorithms to beat their competitors and reduce the amount of bandwidth needed for their customers to stream high definition (HD) video files from the service. For the average broadband user, this means that a full-length HD film will start playing within a second. Other platforms, with extensive download or buffering times and endless false-starts, followed by pixelated low quality images, are looking decidedly out-dated.
California–based video encoding startup eyeIO signed up Netflix as its first customer, using its encoding technology to lower the bitrate of Netflix’s HD video streams. Normally Netflix delivers 720p HD videos with a downstream speed of 3.8 Mbps. eyeIO’s technology optimises the encoding process so that the same 720p video can be accessed by customers with a downstream speed of just 1.8 Mbps. This significant saving is great for customers who want to stream Netflix but do not want to go over any data caps, as well as good for Netflix who do not have to support such a high bandwidth rate.
The bandwidth savings from clever algorithms are helping Netflix to grow very fast. The company is engaged in an aggressive international expansion, having recently added the UK to its coverage. Netflix has also seen significant traction on mobile devices, where bandwidth caps are low, and 3G speeds are much slower than on fixed networks.
Cutting edge algorithms are essential not only in the video streaming sector, but in many business areas. Using the latest software and efficient algorithms can improve the efficiency and profitability of many diverse processes. There is a growing trend for business leaders in all sectors to adapt their business processes to make use of these new developments in computing algorithms. Companies that do not keep up with this growing trend will be left in the dark.