Netflix ‘Working Very Hard’ on ‘Super-Efficient’ Video Delivery to Smartphones
Netflix sees its “partnership” with T-Mobile as an “extension” of its strategy of “making Netflix easier for customers to sign up for and to access and to enjoy,” said CEO Reed Hastings on a Monday earnings Q&A. T-Mobile added a free Netflix subscription to its One family plan packages, the carrier announced last month (see 1709060040).
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Hastings wouldn’t comment on the “economic arrangements” of the T-Mobile partnership, except to say the two companies share “marketing components and marketing benefits,” and T-Mobile “bills on our behalf.” Netflix shares closed 1.6 percent lower Tuesday at $199.48, despite the company's disclosure Monday that it significantly beat its July forecast on Q3 subscription-streaming net additions (see 1710160062).
Netflix is “definitely focused” on making mobile delivery more “effective” from both the “user acquisition” and “member engagement” perspectives, said Chief Product Officer Greg Peters. For Netflix subscribers “who don't have a smart TV at home or maybe want to watch something while they’re on the go, we want to make that a great experience,” said Peters. Netflix is “working very hard” to be sure the encoding it’s using for mobile delivery is “super-efficient, so that we can provide a really, really high-quality video experience with lesser and lesser bits,” he said.
Anime content, for example, is “super-efficient from a coding perspective,” said Peters. Netflix can now provide an “amazing-quality” video experience for anime titles on mobile devices at 150 kbps, “practically unheard of previously,” he said. “So we're super-excited about pushing those numbers down and making that mobile experience as great as we can.”
Netflix hopes by early 2018 to begin “leveraging all the great work” Peters’ team has done on “more efficient encodes” by “opening those up to airlines that partner with us” for in-flight Netflix streaming, said Spencer Wang, vice president-finance, investor relations and corporate development. Netflix can help the airlines “more efficiently use bandwidth in-flight,” said Wang. “We hope that airlines will begin to somewhat support and promote in-flight streaming, which we think is a benefit for our mutual customers.” Netflix thinks in-flight streaming will be “good for our brand,” said Wang.
Representatives of Delta Air Lines and United didn't comment Tuesday on the Netflix in-flight streaming initiative. American Airlines, the largest U.S. carrier, plans on "installing satellite-based WiFi on most of our mainline domestic fleet in the coming years," spokeswoman Sunny Rodriguez said Tuesday. "Customers who pay to connect to the satellite-based WiFi will be able to watch streaming video from their own subscription services."
JetBlue's multiyear relationship with Amazon Video suggests it won't be in the running for a Netflix partnership anytime soon. "Since 2015, JetBlue has offered unlimited streaming entertainment through its partnership with Amazon, allowing customers to enjoy a high-quality and reliable streaming experience at 35,000 feet in the air," JetBlue spokeswoman Julianna Bryan said Tuesday. "With Amazon on JetBlue, JetBlue's differentiated approach of providing high-speed Internet (Fly-Fi) at no additional cost with a variety of entertainment choices and the ability to stream titles from Amazon Video is consistent with the airline's founding mission of bringing humanity back to air travel."