dslreports logo
 story category
Netflix: $.05 to Deliver Movie Stream?
Crunching the numbers behind Netflix broadband video...
A morning hat tip to matt See Profile, who directs our attention to this interesting bit of analysis, where a blogger crunches the numbers on Netflix's successful broadband streaming video model. With the average encoding rate for video streamed to the XBOX 360 around 2000Kbps, one person watching a two hour movie would transfer around 1.8GB of data. Of course that's low-def -- the average encoding bitrate for an HD film is around 3200Kbps, and one user would transfer about 3GB of data per film. With Netflix paying about $0.03 per GB for bandwidth from Limelight and Level 3 -- the author estimates it costs them about $0.06 to deliver one SD movie and $0.09 to deliver one HD movie -- less for shorter fare. As the author notes, those costs don't include licensing fees.
view:
topics flat nest 

fifty nine
join:2002-09-25
Sussex, NJ

fifty nine

Member

Here's why they can get away with it

The HD selection right now is very limited, and I believe it's that way on purpose. So people will not be streaming that many HD movies. SD has a wider selection, but I've watched a few movies in SD and they border on unwatchable. I would rather just wait for the Blu-Ray in the mail.

Most people also have caps so they're not going to be streaming 24x7.

This whole streaming thing is simply a way for Netflix to boost subscriber numbers for its regular DVD service. Some people don't even put DVDs in their queue making it even more profitable for netflix.

I was a netflix sub from 2001-2004. I stopped it because I didn't have that much time to watch movies and 3 movies was just too much. I resubscribed when TiVo got it and even got blu-ray access. Without the streaming option I would have probably not gone back to Netflix in such a hurry.

Matt3
All noise, no signal.
Premium Member
join:2003-07-20
Jamestown, NC

Matt3

Premium Member

Re: Here's why they can get away with it

said by fifty nine:

SD has a wider selection, but I've watched a few movies in SD and they border on unwatchable. I would rather just wait for the Blu-Ray in the mail.
Your experience with SD is not the norm. SD quality is very good, DVD like for me and most reviewers. The quality will auto-adjust itself down to horrible based on your connection however ...

Regardless, what the article illustrates is that as bandwidth consumption goes up, the cost per bit goes down. Not the other way around as most people would have you believe.

Uncle Paul
join:2003-02-04
USA

1 recommendation

Uncle Paul

Member

Re: Here's why they can get away with it

I agree all the non HD content we've watched has been DVD quality. We've actually been very pleased with the service, if only the selection were a bit better.

But, considering it's free on my TIVO and the Netflix service costs about the same as a premium channel like HBO, I call it a win.

Matt3
All noise, no signal.
Premium Member
join:2003-07-20
Jamestown, NC

Matt3

Premium Member

Re: Here's why they can get away with it

said by Uncle Paul:

I agree all the non HD content we've watched has been DVD quality. We've actually been very pleased with the service, if only the selection were a bit better.

But, considering it's free on my TIVO and the Netflix service costs about the same as a premium channel like HBO, I call it a win.
You sound like me. I still have all the newest stuff come in on DVD/Blu-Ray, but love firing it up to watch older content. I read a review one time that said something along the lines of it being perfect for "Curling up on the couch for a rainy weekend of movie watching." I'd agree that is a great use for it. Especially since it's free!

Ytsejamer1
join:2008-01-18
Somersworth, NH

Ytsejamer1

Member

Re: Here's why they can get away with it

Agreed...the value to me as a Netflix customer is great. I love watching movies from their streaming site. Works fine for me and looks decent enough. The added value it offers me for the Netflix monthly charge is so very well worth the $16 or whatever it is.
Natoma6
join:1999-08-30
Brooklyn, NY

Natoma6 to Uncle Paul

Member

to Uncle Paul

Has no one considered AppleTV?

My husband and I rent HD movies all the time to our AppleTV for $3.99-$4.99 a pop. We each have the 160GB version and notice that HD movies from Apple typically reduce our available disk space by about 5-7GB.

So it appears that Apple is encoding their flicks at a higher bitrate than NetFlix.

That said, we have 50/20 FIOS, so we'd definitely love it if someone started streaming movies with bitrates similar to Blu-ray. Talk about a killer app for next generation broadband.
speedy998
join:2002-09-25
Saratoga, CA

speedy998

Member

Re: Has no one considered AppleTV?

said by Natoma6:

My husband and I rent HD movies all the time to our AppleTV for $3.99-$4.99 a pop.
I get Netflix streaming for free. (Well, technically for a monthly fee.) I hate the PPV model Apple uses, and their walled garden approach, so I don't use them.

As an aside, I've watched Netflix on my Tivo and my Roku box. The Roku looks better. Make sure your TiVO is using HDMI or composite video out if you want best quality. I have a (rock solid) 5MB DSL line, and always get the max quality stream. When I had Comcast, it wasn't nearly as solid. Netflix streaming looks as good as a (standard) DVD to me!

uid1307457
Premium Member
join:2005-12-30
Tempe, AZ

uid1307457 to Natoma6

Premium Member

to Natoma6
said by Natoma6:

My husband and I rent HD movies all the time to our AppleTV for $3.99-$4.99 a pop. We each have the 160GB version and notice that HD movies from Apple typically reduce our available disk space by about 5-7GB.

So it appears that Apple is encoding their flicks at a higher bitrate than NetFlix.

That said, we have 50/20 FIOS, so we'd definitely love it if someone started streaming movies with bitrates similar to Blu-ray. Talk about a killer app for next generation broadband.
your also paying 50-100 dollars for the same amount of movies I pay 16 for...
Natoma6
join:1999-08-30
Brooklyn, NY

Natoma6

Member

Re: Has no one considered AppleTV?

said by uid1307457:

your also paying 50-100 dollars for the same amount of movies I pay 16 for...
For a higher quality product? I'll take it.

uid1307457
Premium Member
join:2005-12-30
Tempe, AZ

1 edit

uid1307457

Premium Member

Re: Has no one considered AppleTV?

said by Natoma6:

said by uid1307457:

your also paying 50-100 dollars for the same amount of movies I pay 16 for...
For a higher quality product? I'll take it.
I've watched 72 movies (was on vacation), series, anime, and documentaries so far this month for 99% of the time good quality on my laptop.

FYI, watch Totally Baked: Unrated lol
chemaupr
join:2005-06-06
Alexandria, VA

chemaupr to Natoma6

Member

to Natoma6
so you pay 4 for a movie you can rent at a RedBox for $1 and I hope you do not have cable, becouse if not you could have done the same with cable on demand with out buying the additional hardware.

I have a xbox 360 which also allow you to rent movies online. but i wont pay $4 to rent something that I can get for a 1/4 or less ...
Natoma6
join:1999-08-30
Brooklyn, NY

Natoma6

Member

Re: Has no one considered AppleTV?

said by chemaupr:

so you pay 4 for a movie you can rent at a RedBox for $1 and I hope you do not have cable, becouse if not you could have done the same with cable on demand with out buying the additional hardware.

I have a xbox 360 which also allow you to rent movies online. but i wont pay $4 to rent something that I can get for a 1/4 or less ...
The encode quality is rather terrible in comparison to Apple. Not to mention the fact that Timewarner cable's HD is anything but.

It looks atrocious, particularly fast moving scenes.

DJMASACRE
join:2008-05-27
Nepean, ON

DJMASACRE to Natoma6

Member

to Natoma6
said by Natoma6:

My husband and I rent HD movies all the time to our AppleTV for $3.99-$4.99 a pop. We each have the 160GB version and notice that HD movies from Apple typically reduce our available disk space by about 5-7GB.

So it appears that Apple is encoding their flicks at a higher bitrate than NetFlix.

That said, we have 50/20 FIOS, so we'd definitely love it if someone started streaming movies with bitrates similar to Blu-ray. Talk about a killer app for next generation broadband.
ah all that wasted money when you could have just downloaded them.

uid1307457
Premium Member
join:2005-12-30
Tempe, AZ

uid1307457

Premium Member

Re: Has no one considered AppleTV?

said by DJMASACRE:

said by Natoma6:

My husband and I rent HD movies all the time to our AppleTV for $3.99-$4.99 a pop. We each have the 160GB version and notice that HD movies from Apple typically reduce our available disk space by about 5-7GB.

So it appears that Apple is encoding their flicks at a higher bitrate than NetFlix.

That said, we have 50/20 FIOS, so we'd definitely love it if someone started streaming movies with bitrates similar to Blu-ray. Talk about a killer app for next generation broadband.
ah all that wasted money when you could have just downloaded them.
agreed. or stream them I am up to 83 from my other post...i may break 100 this month.

Matt3
All noise, no signal.
Premium Member
join:2003-07-20
Jamestown, NC

Matt3

Premium Member

Re: Has no one considered AppleTV?

said by uid1307457:

said by DJMASACRE:

said by Natoma6:

My husband and I rent HD movies all the time to our AppleTV for $3.99-$4.99 a pop. We each have the 160GB version and notice that HD movies from Apple typically reduce our available disk space by about 5-7GB.

So it appears that Apple is encoding their flicks at a higher bitrate than NetFlix.

That said, we have 50/20 FIOS, so we'd definitely love it if someone started streaming movies with bitrates similar to Blu-ray. Talk about a killer app for next generation broadband.
ah all that wasted money when you could have just downloaded them.
agreed. or stream them I am up to 83 from my other post...i may break 100 this month.
Stealing is soooo cool. Man, I bet you guys get all the chicks!

DJMASACRE
join:2008-05-27
Nepean, ON

DJMASACRE

Member

Re: Has no one considered AppleTV?

said by Matt3:

Stealing is soooo cool. Man, I bet you guys get all the chicks!
who said stealing. Im not the supplier. I didnt steal anything.

uid1307457
Premium Member
join:2005-12-30
Tempe, AZ

uid1307457 to Matt3

Premium Member

to Matt3
said by Matt3:

Stealing is soooo cool. Man, I bet you guys get all the chicks!
steal? ever heard of instant netflix?

fifty nine
join:2002-09-25
Sussex, NJ

fifty nine to Matt3

Member

to Matt3
said by Matt3:

said by fifty nine:

SD has a wider selection, but I've watched a few movies in SD and they border on unwatchable. I would rather just wait for the Blu-Ray in the mail.
Your experience with SD is not the norm. SD quality is very good, DVD like for me and most reviewers. The quality will auto-adjust itself down to horrible based on your connection however ...

Regardless, what the article illustrates is that as bandwidth consumption goes up, the cost per bit goes down. Not the other way around as most people would have you believe.
Just out of curiousity, what kind of TV are you viewing it on? I'm using a 56" DLP. DVDs are noticeably better. It's not bandwidth related because I get all of the SD quality bars and I have a 30 meg connection.

It could be that:

I'm using a 56" HDTV

I'm using an upconverting DVD player for DVDs (Sony)

Or it could be that I haven't watched a SD movie in a while. I know they've had some really bad encodes in the past.

Matt3
All noise, no signal.
Premium Member
join:2003-07-20
Jamestown, NC

Matt3

Premium Member

Re: Here's why they can get away with it

said by fifty nine:

said by Matt3:

said by fifty nine:

SD has a wider selection, but I've watched a few movies in SD and they border on unwatchable. I would rather just wait for the Blu-Ray in the mail.
Your experience with SD is not the norm. SD quality is very good, DVD like for me and most reviewers. The quality will auto-adjust itself down to horrible based on your connection however ...

Regardless, what the article illustrates is that as bandwidth consumption goes up, the cost per bit goes down. Not the other way around as most people would have you believe.
Just out of curiousity, what kind of TV are you viewing it on? I'm using a 56" DLP. DVDs are noticeably better. It's not bandwidth related because I get all of the SD quality bars and I have a 30 meg connection.

It could be that:

I'm using a 56" HDTV

I'm using an upconverting DVD player for DVDs (Sony)

Or it could be that I haven't watched a SD movie in a while. I know they've had some really bad encodes in the past.
I watch on a 42" plasma mainly. I also have an upconvert DVD player as well as a Blu-Ray player. The quality really is very good, but I have noticed that some movies just suck. Deep Blue Sea is a great example ... but I think it's because the source material is crap. I even had them send me the DVD because the stream quality was pretty bad, but the DVD was actually WORSE.

It seems the newer stuff that is added is great quality, but once you start getting into some of the first online offerings the quality goes downhill. I wonder if at some point they started encoding with higher quality or a better codec?

fifty nine
join:2002-09-25
Sussex, NJ

fifty nine

Member

Re: Here's why they can get away with it

Could be just the older encodes then. I remember Pirates of the Caribbean Dead Man's chest was simply unwatchable. Realplayer back in 1999 would have been better.

funchords
Hello
MVM
join:2001-03-11
Yarmouth Port, MA

funchords

MVM

Re: Here's why they can get away with it

said by fifty nine:

Could be just the older encodes then. I remember Pirates of the Caribbean Dead Man's chest was simply unwatchable. Realplayer back in 1999 would have been better.
I wish these streaming video outfits would actually try their products on different connections. They might work in the lab, but on a very latent 3G or satellite connection, they often suck rocks.

fifty nine
join:2002-09-25
Sussex, NJ

fifty nine

Member

Re: Here's why they can get away with it

It's not my connection:


Matt3
All noise, no signal.
Premium Member
join:2003-07-20
Jamestown, NC

Matt3

Premium Member

Re: Here's why they can get away with it

said by fifty nine:

It's not my connection:


Speed doesn't mean jack. You could have horrible routing to Netflix but not that speedtest server. Run TCPView while streaming a Netflix movie, figure out if you are being routed across the country or not. They have servers in CA and WDC I believe and a LOT of people are routed to the CA servers rather than the WDC servers.

I've watched Dead Man's Chest btw and it's one of the best quality SD movies they have. I bet you are being sent across the country.

fifty nine
join:2002-09-25
Sussex, NJ

1 recommendation

fifty nine

Member

Re: Here's why they can get away with it

said by Matt3:

said by fifty nine:

It's not my connection:


Speed doesn't mean jack. You could have horrible routing to Netflix but not that speedtest server. Run TCPView while streaming a Netflix movie, figure out if you are being routed across the country or not. They have servers in CA and WDC I believe and a LOT of people are routed to the CA servers rather than the WDC servers.

I've watched Dead Man's Chest btw and it's one of the best quality SD movies they have. I bet you are being sent across the country.
Not really. I have no problem with viewing any of the HD content. My connection is fine. PenTeleData has a pretty good network and they are peered in several places. Furthermore, since it's LLNW you are not far from a peering point. (We also use LLNW for our content).

It was definitely due to the quality of the encode.

Come to think of it, I've just figured out why I got the low quality encodes. There were encodes that were problematic with TiVo (it would cause the TiVo to crash and reboot) so they pulled them for TiVo users and gave us the lower quality ones for a lot of movies. Dead man's chest was one of those that they pulled so we got a lower quality one.

The last SD movie I watched was Frequency which was pretty good quality. I don't have the DVD so I can't compare though.

Uncle Paul
join:2003-02-04
USA

Uncle Paul

Member

Re: Here's why they can get away with it

I have a Tivo HD unit with a HD Mitsubishi 52" rear projection. It will only do 1080i, but we keep it tuned and it delivers a really beautiful crisp picture in HD.

The streaming shows look DVD quality over an ATT 3mb DSL connection.

fifty nine
join:2002-09-25
Sussex, NJ

fifty nine

Member

Re: Here's why they can get away with it

It will "only" do 1080i?

Uncle Paul
join:2003-02-04
USA

Uncle Paul

Member

Re: Here's why they can get away with it

LOL no, only HD res it does is 1080i.

Matt3
All noise, no signal.
Premium Member
join:2003-07-20
Jamestown, NC

Matt3 to funchords

Premium Member

to funchords
said by funchords:

said by fifty nine:

Could be just the older encodes then. I remember Pirates of the Caribbean Dead Man's chest was simply unwatchable. Realplayer back in 1999 would have been better.
I wish these streaming video outfits would actually try their products on different connections. They might work in the lab, but on a very latent 3G or satellite connection, they often suck rocks.
It should work fine on a satellite connection once the stream starts. 3G is a different story though, although I have a friend who can watch SD content on his 768Kbps RR connections ... although it is borderline.

I really don't think this service is aimed at the small percentage of 3G home users or satellite users.

shutrbug
join:2000-10-18
San Jose, CA

1 recommendation

shutrbug to Matt3

Member

to Matt3
said by Matt3:

Your experience with SD is not the norm. SD quality is very good, DVD like for me and most reviewers. The quality will auto-adjust itself down to horrible based on your connection however ...
If you've got a Roku Netflix box, you can lock the quality at whatever level you want as described here: »community.netflix.com/fo ··· 3A186121
AstroBoy
join:2008-08-08
Parkville, MD

AstroBoy

Member

Re: Here's why they can get away with it

said by shutrbug:

said by Matt3:

Your experience with SD is not the norm. SD quality is very good, DVD like for me and most reviewers. The quality will auto-adjust itself down to horrible based on your connection however ...
If you've got a Roku Netflix box, you can lock the quality at whatever level you want as described here: »community.netflix.com/fo ··· 3A186121
Yes! I do this. Locked it at the max and it is noticeably better. No idea why. I have 6.5mb cable.
88615298 (banned)
join:2004-07-28
West Tenness

88615298 (banned) to fifty nine

Member

to fifty nine
said by fifty nine:

The HD selection right now is very limited, and I believe it's that way on purpose. So people will not be streaming that many HD movies. SD has a wider selection, but I've watched a few movies in SD and they border on unwatchable. I would rather just wait for the Blu-Ray in the mail.

Most people also have caps so they're not going to be streaming 24x7.

This whole streaming thing is simply a way for Netflix to boost subscriber numbers for its regular DVD service. Some people don't even put DVDs in their queue making it even more profitable for netflix.

I was a netflix sub from 2001-2004. I stopped it because I didn't have that much time to watch movies and 3 movies was just too much. I resubscribed when TiVo got it and even got blu-ray access. Without the streaming option I would have probably not gone back to Netflix in such a hurry.
Get away with what? The streaming is an ADDED feature. It's not like you pay for it separately. Also as the OP said this doesn't include licensing fees.

The bigger question is that if netflix only pays 3¢ per GB how come ISPs want to charge $1 or more per GB overage? And the 250 GB cap that Charter and Comcast have only costs them $7.50 are they telling me it's cost them nearly $60 to provide everything else associated with an internet connection? Hardly. One also has to wonder how mobile companies can get away with $256 and $503 per GB overage fees.

•••••••••••••••••••
ElJay
join:2004-03-17
Portland, ME
Ubiquiti EdgeRouter Lite
Ubiquiti Unifi UAP-AC-LITE

ElJay to fifty nine

Member

to fifty nine
SD quality has generally been very good for me, but I admit I only watch on a 27" screen. The only really lousy titles have been from the Starz library. Those are encoded rather poorly, not to mention that Starz screws with the aspect ratio and applies dynamic range compression to the sound. The most annoying artifact of the Starz titles is that camera pans become jerky, as if they're got the video encoder set to "quality" and not enough bits to properly do 24fps. This artifact does remind one of Real Video.

old_dawg
"I Know Noting..."
join:2001-09-22
Westminster, MD

1 recommendation

old_dawg to fifty nine

Member

to fifty nine
Just because the wrapping paper is pretty does mean that what's inside is worth watching. "DUMB and DUMBER" is *still* DUMB high rez or not.

Robert
Premium Member
join:2001-08-25
Miami, FL

Robert

Premium Member

Not too happy..

I have the Roku.

When I first got it, it was great. There were so many movies I wanted to watch and didn't want to wait for the DVD.

Now, it's boring. They keep releasing old movies. It'd be nice if they released more newer movies. I check at least 3 times a week to see what new movies were released for instant viewing and it's all stuff that I've already seen, or has been out for 10+ years.

••••••
Joe12345678
join:2003-07-22
Des Plaines, IL

Joe12345678

Member

What does it cost for the Direct TV VOD downloads in data co

What does it cost for the Direct TV VOD downloads in data cost?

do they get any real good deals as they are teamed up with ATT now?

uid1307457
Premium Member
join:2005-12-30
Tempe, AZ

uid1307457

Premium Member

Re: What does it cost for the Direct TV VOD downloads in data co

said by Joe12345678:

What does it cost for the Direct TV VOD downloads in data cost?

do they get any real good deals as they are teamed up with ATT now?
free for DVR users

handydave
join:2000-12-14
Totowa, NJ

1 recommendation

handydave

Member

Rates

Still cheaper than US Postal Rate

FLengineer
CCNA, CEH, MCSA
Premium Member
join:2007-06-26
Deltona, FL

FLengineer

Premium Member

I want Level 3 as an ISP

Level 3 is charging $0.03 per GB while Comcast and Time Warner feels $1 per GB overage charges is acceptable.

NetFlix ------ Level 3 ------- Comcast ------- Me
Send 2GB ----- $0.06 ------- $2.00 ------- Recieve 2GB

•••••••••••••••

battleop
join:2005-09-28
00000

1 recommendation

battleop

Member

Why do these stories make the front page?

It's nothing but assumptions. There are no facts in this story. Just the ramblings of another self appointed expert.

•••••••••••••
travelguy
join:1999-09-03
Bismarck, ND
Asus RT-AC68
Ubiquiti NSM5

1 edit

travelguy

Member

You're missing the point...

Most people have a limited (finite) amount of time that they will spend watching TV. Any online watching will displace watching a mailed DVD.

Since a mailed DVD costs Netflix around a dollar round trip just for postage, watching online is a huge cost saver for them...

edited to clarify

•••

Bit00
Premium Member
join:2009-02-19
00000

1 edit

Bit00

Premium Member

Way cheaper than mailing them...

As noted already by handydave See Profile, even with bulk rate mail it costs them way more than that to pull from stock, mail 2 directions and receive back into their stock. Even at $.09 per movie streaming, they could may be able to stream a dozen or more for what it actually costs them to send out and receive a single disc.

Plus how many subscribers (like me) are subscribing ONLY because they offer the streaming. I don't bother with the DVDs at all and I may watch 2 or 3 streamed movies a week on my $9/mo plan.

Fox McCloud
Crazy like a fox.
join:2006-07-23

Fox McCloud

Member

oh brother

To those who are complaining about the overage charges, it's the logical result of one and only one thing: the government. Thanks to the State+city+Local governments granting monopoly status to one and usually only one telephone and cable company in an area, it's only natural for rates to be higher, as competition isn't at its optimal best....of course, the FCC has a lot to do with it as well.

But in any event, the other reason it's higher is that it gives them more of a profit margin which may make it easier to pay their employees, offer higher wages to attract better management (or better employees) and invest in R&D.

Anyway, I love Netflix, and it's worked quite well for me on my 10 meg connection...I've really only had 3 hiccups, 2 of which corrected themselves eventually....I'm aware it's not the greatest for some users, but hey, this service is not fully developed yet, so I'm sure there's still lots of routing issues and bugs to work out.

Give it time, Netflix will do anything and everything, IMHO to bury Blockbuster once and for all.

jsz0
Premium Member
join:2008-01-23
Jewett City, CT

jsz0

Premium Member

It's cheap...

No doubt it's really cheap to deliver massive amounts of data from a super well connected data center(s) The more interesting question would be how much does the same movie cost the ISP in terms of last-mile bandwidth?

ultracooldave
@verizon.net

ultracooldave

Anon

Re: It's cheap...

The point is- it ain't going to last, ie. unlimited bandwidth free. Also, don't count on your internet connection working perfectly no matter what the speed while steaming HD, do count on disruptions in your service-happening now- I believe intentionally.
A better solution to HD/Blu ray is what many are doing now with Dish network-record their HD (1080i) to an external harddrive USB 2.0 which is available for any of their HD receivers- DVR or not, as long as it has a usb port.
I now have 121 movies recorded on my 1000G harddrive taking 600G of space, all in 1080i. I figure it will hold nearly 200 HD movies, so for $100 it works out to be 50 cents a movie in storage cost. All instantly available with the remote. All with the normal dish info when you click on a movie.
There is a one time $40 fee per household to turn this on for all HD receivers you have. The picture quality is better than any dvd, upconverted or not since the source is usually bluray downgraded to 1080i.
I have just upgraded to my third HD receiver - for free inc. install,(you do not need the expensive DVR) and 2 more 1000G harddrives. This also gives me another 3 months free of the movie channels. Every year I can usually get 3 months free one way or another. I love not having a million discs to keep track of or pay for bluray.
SuperWISP
join:2007-04-17
Laramie, WY

SuperWISP to jsz0

Member

to jsz0

ISP costs

If the ISP is in a rural area, and is paying $100 per Mbps per month (or $325, as I've seen in some places), the cost is obviously a lot higher. Expect ISPs to start capping and throttling. not because they want to, but because they have to.