As YouTube and Netflix relieve bandwidth demand, who’s next?

The call to reduce video quality and limit network constraints will extend beyond streamers during the COVID-19 crisis as consumer demand rises.
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While Netflix and YouTube have been a boon to Canadians cooped up in their homes to stop the spread of COVID-19, this week the streamers have begun to lower their video quality to combat the growing bandwidth demands.

Beginning on Tuesday (March 24), YouTube set its global default video quality to standard definition (480p; SD), rather than high definition (HD) qualities like 720p or 1080p. Netflix announced Thursday (March 26) it would lower the highest video quality for each bandwidth stream (Ultra-HR, HD, SD) to reduce traffic on telecommunications by 25%. “We believe that this will provide significant relief to congested networks and will be deploying it in Canada for the next 30 days,” said Ken Florance, VP Content Delivery at Netflix, in a statement.

Netflix has 6.5 million subscribers in Canada, while Canadians account for 17.6 million of YouTube’s monthly visitors, according to comScore.

Efforts to limit bandwidth constraints began in Europe, when EU officials called for popular streaming services to reduce video quality as lockdowns began to impact network capabilities. Amazon Prime Video, Facebook Live and Disney+ are expected to follow Netflix and YouTube in cutting video quality in Canada.

As the pandemic rages on across the globe and more individuals embrace social distancing measures, the strain on network bandwidths will only grow. “Think of the data you get in your home like a pipe,” says Adam Rumanek, CEO and co-founder of digital rights management company Aux Mode. “If more people are streaming, that pipe is going to get smaller and smaller for the amount of people using it. There’s not enough bandwidth to feed municipalities.”

Social distancing has led significant audience and consumer behaviour changes across digital platforms, according to a report from comScore. The increased engagement is strong not only on news and entertainment but religious/spiritual content (up 27% in screen time). Rumanek says in the U.S. there has been an estimated 60% increase in home internet usage during traditional nine to five work hours.

The bandwidth situation goes beyond whether Netflix customers can binge Tiger King in Ultra-HD. The concern for governments is the impact on telecommunications, where front-line workers and first responders can’t afford disruptions on calls and other forms of communication. A spokesperson for the Ministry of Innovation, Science and Economic Development told Playback Daily the federal government is “engaged with Canada’s telecommunications service providers to ensure that they can continue to provide the essential services upon which we all rely to stay connected and informed, now more than ever.”

While the focus on reducing video quality has so far squared on streaming sites, Rumanek says it’s inevitable that the government will ask other bandwidth consumers to cut video quality, citing gaming sites and the porn industry as having a major impact. “Companies like Twitch are going to have to slow down streams or limit the amount of users in a single stream, because some of them can get pretty big,” he says. “For R-rated sites, the government could go in and shut them all down, because internet service providers aren’t going to do it.”

Even traditional TV isn’t immune. “The same restrictions will come to [cable companies like] Rogers,” says Rumanek. “Anyone who is carrying 4K content will have to lower the resolution. They’re just chewing the bandwidth.”

A spokesperson for Rogers told Playback Daily that there have been no changes to its 4K channels as of press time. The cable provider delivers 4K channels such as Rogers Media’s Sportsnet and Blue Ant Media’s Love Nature.

Rumanek says his advice is for companies to “come out ahead and be proactive,” such as YouTube’s decision to self-regulate globally. “When the end [of the pandemic] does come, people will be looking at who was a team player,” he says.

He also doesn’t anticipate much backlash from consumers as video qualities go down. He says the least impacted will be kids, who won’t care about a reduction from 4K to 720p since “they just like to watch what they watch.” He adds that while public areas like parks continue to shut down, parents will rely on video content and games to keep kids occupied, and will be happy to cope with lower resolution.

And while there will always be a vocal minority of adults miffed about not getting their top-quality streams, Rumanek doesn’t see it impacting the bottom line. “Statistically speaking, the unsubscribe rate is so low,” he says. “Ask yourself when you last unsubscribed from something, and it’s almost never.”

In fact, digital companies can only grow as a result of COVID-19. Rumanek says his clients have reported a 50% increase in ad revenue in January and February and he expects usage will “skyrocket,” even after the end of the pandemic. “When we come out of it, I don’t think we’re going to drop 50%,” he says. “[Older generations] will be more comfortable using this technology in the future, which will, on a whole, grow the entire digital world.

“The whole world is going to figure out how streaming works.”

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