Netflix Success Rattles Nine Network CEO

Written by David Richards     14/01/2016 | 08:38 | Category: IPTV

Netflix who now has over 1.4 Million subscribers in Australia is looking to commission local content production, for global release, according to senior executives of the global streaming Company.

Netflix Success Rattles Nine Network CEO
During an interview with ChannelNews at CES 2016, senior Netflix US executives said that they were currently talking to local production Companies and that there were real possibilities for a Netflix series to be shot in Australia in the future. 

Currently Netflix produced content is proving "extremely" popular in Australia with subscriber's gravitating to Netflix 4K content in "big numbers" despite slow network speeeds in Australia.   

Chief Content Officer Ted Sarandos said that Netflix currently has 10 feature films, 30 kids' series, about a dozen feature documentaries, 10 stand-up specials and two documentary series in various stages of production.

"This is programming that people want to watch," Sarandos said.

While Netflix is not employing staff in Australia they are looking to invest in other ways executives said. 

The global content Company is currently introducing new streaming technology, that will "significantly improve the streaming of content to Australian subscribers the Company said.

Recently Netflix begun to embark on one of the biggest changes to its streaming technology since it launched its online video service in 2007. If all goes according to plan, the switch could help consumers get better-looking streams while also saving up to 20 percent of data - which is significant in Australia where broadband is slow compared to several other Countries. 

Netflix has been working on this new technology since 2011, members of its video algorithms team realised that they had gotten it all wrong. Like practically everyone else in the online video world, Netflix had been preparing its video files for streaming based on the bandwidth available to consumers. 

Some Netflix subscribers were accessing the service with slow DSL connections, others had faster cable connections, and a lucky few were already online with NBN fibre speeds.

Now the Companies video algorithms team had developed a number of quality levels, or recipes, as they're called in the world of video encoding.

Each video file on Netflix's servers was being prepared with these same recipes to make multiple versions necessary to serve users at different speeds. 

At the lowest end was a file encoded with a bit rate of 235 kbps, which would work even on very slow connections, but also only deliver a resolution of 320 by 240 pixels. Somewhere in the middle was a 1750 kbps file for a resolution of 1280 by 720, and the best quality was a 5800 kbps version for a great-looking 1080p experience.

Netflix's service has been dynamically delivering these versions based on a consumer's bandwidth needs, which is why the quality of a stream occasionally shifts in the middle of a binge-watching session. But across its entire catalogue of movies and TV shows, the company has been using the same rules - which didn't really make sense. "You shouldn't allocate the same amount of bits for 'My Little Pony' as for 'The Avengers,'" explained Netflix video algorithms manager Anne Aaron.


Yesterday the chief executive of the Nine Network Hugh Marks took a pot shot at Netflix claiming that Netflix will jeopardise Australian jobs and original local programming, unless the government pushes ahead with broad changes to media laws.

Marks who has not said how many paying subscribers his competing Stan service has told the Australian newspaper "We need government to ensure a level playing field for Australian businesses - things are getting hairy amid increasing competition from overseas ?entrants," he said. "Netflix has just one person based in Australia, and they don't employ any journalists. They're taxed differently. While they don't use terrestrial spectrum, they don't pay a licence fee."

Mr Marks pointed out that Netflix - which competes with Stan, a joint venture between Nine and Fairfax Media - did not have the same regulatory burden as local players, including tax liabilities, content quotas and advertising restrictions. In less than a year, Netflix had hit 8 per cent of Australian homes, reaching 1.89 million ?people older than 14.

He said the regulations limited and constrained Australian free-to-air networks while Netflix and advertising giants such as Google and Facebook operated more freely, using the internet to broadcast to the entire population.

"Our ability to create local content and compete with inter?national players would be enhanced by not having artificial rules in place." he said.