After hitting an all-time record on Tuesday, Kiwis' peak internet usage eased back noticeably yesterday - and big bandwidth-saving move by Netflix will have helped.

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Overnight on Tuesday, the streaming giant reduced its bit rate - or the amount of data it sends over New Zealand's broadband networks - by 25 per cent.

A loss of bit rate can mean a loss of picture quality, but Netflix implies most customers won't notice any difference.

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"If you are particularly tuned into video quality you may notice a very slight decrease in quality within each resolution. But you will still get the video quality you paid for," the company says in a blog post on its site.

Google-owned YouTube and Amazon's Prime Video are taking similar steps.

Certainly, there was an immediate impact on total traffic on the network operated by Chorus, which controls the lion's share of UFB fibre and almost all copper lines.

Peak traffic last night reached 2.64 terabits per second, down from a peak of 2.75Tbps on Tuesday, and "still comfortably within available headroom", Chorus said this morning.

The network operator says its network could take a peak load of 3.5Tbps.

Before the Covid-19 outbreak, its record peak usage was the 2.6Tbit/s hit during the Rugby World Cup.

Although New Zealand's broadband is so far holding up well under a surge in video conferencing and lockdown entertainment streaming (unlike voice calls), Netflix has taken a better-safe-than-sorry approach - the Herald understands after talks with Communications Minister Kris Faafoi and ISPs.

The approach was first rolled out in Spain and Italy, which were among the first countries to go into lockdown.

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"Given the crisis, we've developed a way to reduce Netflix's traffic on telecommunications networks by 25 per cent while also maintaining the quality of our service," a spokesperson said.

"So consumers should continue to get the quality that comes with their plan - whether it's Ultra-High, High or Standard Definition. We believe that this will provide significant relief to congested networks and will be deploying it in New Zealand for the next 30 days."

Following testing in Europe, the company says it is confident that the user experience shouldn't be affected at a local level.

The company says that shows can have as many different streams for a single title within each resolution. All it has done is simply remove the highest bandwidth streams.


This move comes as local broadband companies face enormous demand.

Chorus traffic peaked at 2.6 terabytes per second last night, exceeding the Rugby World Cup 2019 peak traffic for the first time.

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Despite this massive spike, Chorus says it has a capacity for peak traffic of 3.5 terabits per second - or around 40 per cent more than last night's peak.

Netflix has had to remove its highest quality streams in response to massive demand. Photo / Getty Images
Netflix has had to remove its highest quality streams in response to massive demand. Photo / Getty Images

New Zealand isn't the only country facing unprecedented demand.

Because of the pandemic, streaming surged this past weekend, according to Wurl Inc., a company that delivers video and advertising to connected TVs. The amount of time people spent streaming spiked by more than 20 per cent worldwide, including more than 40 per cent in Austria and Spain.

While streaming services haven't commented on any increases in traffic, researchers are seeing more activity in places like Netflix and Twitch, the online gaming network owned by Amazon.com. Installs of the Netflix app leaped 34 per cent last week in Spain and 57 per cent in Italy, according to SensorTower. Italy has the second-most coronavirus cases worldwide, after China.

"While video streaming is far from the most important thing on the world agenda, it is an industry that indirectly will see a major shift due to the crisis," said Sean Doherty, Wurl's chief executive officer.

Driving that growth is the collapse of many leisure and entertainment activities because of the virus, from restaurants and movie theatres to professional sports and concerts.

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The swift expansion of streaming use comes with some challenges. Austrian regulators are considering suspending neutrality rules to let network operators throttle Netflix bandwidth, after a rise in data congestion complaints from people working at home, an Austrian newspaper reported.

Media companies have torn up their normal strategies to satisfy growing demand for programming from people stuck at home. Universal Pictures, the studio division of cable giant Comcast, will offer three movies for rental at home before they leave theatres, while Walt Disney Co. released Frozen 2 on its streaming services months ahead of schedule.

While viewing of live TV is also on the rise thanks to 24/7 coverage of the virus outbreak and more people being stuck at home, production of most TV shows and movies has halted for the foreseeable future, creating a potential shortage of new programming.

Streaming services are in a good position because consumers look to them for their libraries of titles on demand - not a live feed - and they have already banked programmes for release in the weeks ahead.

Traditional TV networks must be on the air 24 hours a day, and outlets such as CBS, Turner and ESPN have scrambled to replace the live sports that have gone on hiatus.

That's opened the door to unconventional forms of programming, from marble rolling to live in-home concerts. Singer John Legend performed from his home on Tuesday, streaming live on Instagram for an audience that reached almost 100,000 people.

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One industry that may face minimal disruption from the pandemic is video games, which participants have long enjoyed and played without being in the same place.

The audience at Twitch, which lets viewers see gamers compete via livestreams, has increased 10 per cent in the past few days, according to Doron Nir, CEO of StreamElements, a provider of tools and services to the industry. And YouTube Gaming is up 15 per cent, he said.

"With more stay-at-home mandates being issued around the world and the entertainment industry finding new ways to migrate their offerings to livestreaming platforms, we expect to see these numbers rise," he said in an email.

David Steinberg, who is 27 and streams himself playing video games, saw an influx of viewers in recent weeks as more people have been staying home.

"Now that sports are cancelled - NBA, PGA - they are just out of stuff to watch," he said. "I am a one-man army here in my basement and I can still create content. And with so many people looking online - especially on Facebook, where they check how is their family is doing - it's been good."

An increase in viewers could translate into more revenue from advertisers or sponsors looking to reach that captive audience, unless, that is, those companies tighten their belts, too. Steinberg says his total audience across sites like Facebook and YouTube is 3.5 million.

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"I've gotten thousands of messages from people," Steinberg said.

- With Bloomberg