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Caps like this will fuel development of incredibly efficient codecs that will make the size of deliverables relatively trivial.
In the meantime, Netflix's Chief Product Officer Neil Hunt , poor guy, thinks that bandwidth will increase in the future which will allow his firm to deliver pristine quality goods over residential pipes.
Today we have rights to deliver about 400 streams in HD (720p). More titles will be added over time. We experimented with first-generation WMV3 encodes at 4000kbps and 5500kbps, but settled on second-generation HD encodes with VC1AP at 2600kbps and 3800kbps, which extends their accessibility down to lower home broadband connections. As with SD, encodes of film material are at 24fps, and encodes of shot-to-video material are at 30fps (or 25fps for PAL), rather than the 60fps that would come from a Blu-ray disc - we judged the 60fps content as too expensive of bandwidth for now. In general, these encodes are definitively better than SD, but won't challenge well-executed Blu-ray encodes - that would require a bitrate out of reach for most domestic broadband today. We believe Moore's law will drive home broadband higher and higher enabling full 1080p60 encodes in a few years.
Yeah, maybe one or two movies a year, if you do it in little monthly chunks.
Codecs can get more efficient, but there's a limit to what they can achieve. Meanwhile, bandwidth is cheap. These ISPs who are capping low and overcharging are 1) abusing monopoly positions and 2) trying to create artificial scarcity.
At the best case of 2600kbps, you'd be able to watch almost 13.5 hours of Netflix streaming content per month if you were a Rogers Lite user and nearly 71.7 hours of Netflix streaming content if you were an Extreme user.
This might sound like a lot, but that's without any other network activity. Plus, even absent any other network activity, that's only 2 hours per day on the Extreme plan or 27 minutes per day on the Lite plan.
Regardless, in the video world, no matter how "good" a codec gets, it still lowers the quality of what it is distributing. You simply can't take a bunch of bits out and then mathematically calculate what it is that was there and put them all back with 100% accuracy. It simply has never happened and will never happen. This becomes a bigger problem as screens get bigger and resolutions get higher.