Netflix has warned Australia's ISPs that they are "going to be forced to up their game" after its arrival in Australia next year as the local media streaming space faces a major shake-up.
Australian customers will finally be able to access a local iteration of the US-based subscription TV and movie streaming service in, though as many as 200,000 Australians are already subscribed to the US version of Netflix via VPN, according to numbers cited by the company.
Netflix offers a three-tiered pricing structure with the ability to stream in standard definition and HD as well as bandwidth-hungry 4K. This has raised questions about whether Australia's broadband infrastructure is ready for more streaming, especially as other players in the market expect Netflix's arrival tofor media streaming across the board.
The company's Director of Corporate Communications & Technology Cliff Edwards says Netflix is designed to get the most out of each customer's available bandwidth (with software that detects TV resolution and "adaptive bit-rate streaming" that steps down resolution at points of network congestion).
"People would rather see a step down in resolution than to see buffering. If you're sitting there waiting for something else to happen you say 'I'm going to bed' or 'I'm going to read a book' and you've lost that Netflix experience," said Edwards.
However, while Netflix has systems in place to deal with slow broadband speeds, the company says Australia's ISPs will need to come to the table too. With Netflix's 4K streaming, and with only 15 percent of Australians getting speeds of 10Mbps or above, there could be a chasm between what consumers expect and what Australian broadband infrastructure can deliver.
"The issue [of broadband speeds] comes up in every market that you launch in, because internet video has been growing by leaps and bounds. And so far, no country has run into real limitations there."
But he added, "the broadband providers themselves, they're going to be forced to up their game".
Edwards said quality of streaming would progress with "improvements in compression algorithms" but that the broadband quality comes down, in part, to what consumers demand.
"It's just a matter of the investment that the broadband providers want to make, and it's right now a chicken and egg thing -- they don't want to make the investment if they're not sure people want to do it. You guys have seen this with the broadband network here. It's like been this sort of nightmarish monster," he said.
Despite this, Edwards is positive about the future of streaming in Australia, saying that "as the internet grows, you're going to see much more bandwidth," hopefully leading to a better experience for all streaming customers into the future.