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Updated. Netflix (s NFLX) added a limited number of 3-D titles to its library Tuesday, and also introduced a new, higher-quality 1080p HD format dubbed Super HD that promises an even better picture quality than the service’s regular 1080p HD streams. The catch: Both 3-D and Super HD are only available to customers whose ISPs are using Netflix’s own Open Connect CDN.
The company has even built a page that allows you to check whether your ISP is already using Open Connect, and suggests that you should give the ISP a ring if they don’t. In other words: It’s enlisting its customers in its push to replace third-party CDNs with its own delivery network, effectively turning a complex peering war that has been largely happening behind the curtains into a catchy consumer issue.
3-D and Super HD: device support and bandwidth requirements
But first things first: It’s worth pointing out than Netflix isn’t betting its future on 3-D. The company added a few dozen titles this week, which include a few Red Bull action sports flicks as well as nature series from 3net. It also made a
small number of titles available in Super HD, which can be played on the PS3, (s PSN) Roku devices, the Wii (s NTDOY) U, Windows (s MSFT) 8 devices as well as some Blu-ray players and Smart TVs. Update: A spokesperson contacted us to clarify that the number of Super HD titles is already substantial, and that the goal is to have pretty much every HD title available in Super HD.
Super HD comes in two different encoding qualities, and Netflix recommends that consumers have at least 7 Mbps of bandwidth available for the higher-quality version, with 5 Mbps being enough to sustain a less demanding Super HD stream. 3-D streams need at least 6 Mbps of bandwidth, with the best quality topping out at around 12 Mbps.
Suddenly, peering is all about 3-D
That’s a lot of bandwidth, and it makes economic sense for Netflix to deliver these bits through its own CDN as opposed through networks run by the likes of Akamai (s AKAM) and Limelight. (s LLNW) A Netflix spokesperson also pointed out Monday that Open Connect was specifically built for Netflix streaming, which gives the company confidence that it will support those more taxing streams.
But there’s something else at play here as well: Netflix has become a major source of traffic. The company is now responsible for about one-third of all residential downstream traffic during peak times. And the question of who has to pay for that traffic has become a source of contention.
The issue blew up in 2010, when Level 3 (s LVLT) accused Comcast (s CMCSK) of violating net neutrality by asking them to pay for delivering Netflix traffic to Comcast consumers. Comcast argued at the time that this was a simple peering disagreement. What actually happened is to this day a bit of a mystery, but Netflix may just have figured out a way to sidestep all of these business and policy issues: By enlisting the consumer, it may have found an effective weapon to pressure ISPs to get in line and sign up for Open Connect.
Not that all ISPs object the idea of a Netflix CDN to begin with: Also on Tuesday, Netflix announced that the majority of its international traffic is now delivered via Open Connect, with major international ISPs like Virgin Media and British Telecom already getting their Netflix bits through the network. In the U.S., it counts Cablevision (s CVC) as one of its Open Connect-using ISPs – but CEO Reed Hastings made it clear that he wants to win over others as well. “Our goal is to have all of our members served by Open Connect as soon as possible,” he said.