For many consumers, Netflix may be synonymous with shows like "Stranger Things" and "Narcos." But even as Netflix establishes itself as a global TV network, it is still very much a tech company at heart. The company spends more resources than virtually any of its close competitors on getting the tech behind its streaming service right.
Most of that happens behind the scenes, but this week, Netflix invited journalists from around the world to its offices in Hollywood and Los Gatos, Calif., to shine the spotlight on some of this work. Here are a few of the tidbits shared by the company that show just how advanced Netflix's tech operations are.
Netflix has its own cell towers. Netflix wants to test its app running on mobile devices under a variety of conditions available around the world, so the company decided to bring the operating equipment of six cell towers to its Los Gatos offices. "Minus the towers," quipped Scott Ryder, the company's director of mobile streaming.
Inside Netflix's mobile device lab: Each of these boxes houses dozens of phones and tablets, shielded from outside wireless interference.
The cell tower equipment is housed in the company's mobile device lab, where they are joined by a number of cabinets that look like fancy Netflix-themed fridges, but in reality are Faraday cage-like boxes to suppress any outside interference, and also make sure that those experimental cell towers don't mess up phone reception on the rest of the campus.
Each of these boxes can house dozens of devices, and emulate certain mobile or Wi-Fi conditions. "We can make a box look like India, we can make a box look like the Netherlands," Ryder said. Altogether, Netflix runs over 125,000 tests in its mobile lab every single day.
Inside Netflix's mobile device lab: These cabinets house the equipment for three of Netflix's six cell phone towers.
The Netflix button is a big deal. Years ago, when Netflix started to bring its app to smart TVs and other streaming devices, it began to negotiate with the manufacturers of these devices to include a Netflix button on their remote controls. That button has been a solid success story for the company. Consumers who have the button use it a lot, said Netflix VP of device ecosystem Scott Mirer. In fact, on most devices with a button on the remote, it accounts for the majority of Netflix app launches.
Netflix just re-encoded its entire catalog, again. To optimize videos for mobile viewing, Netflix recently re-encoded its entire catalog on a per-scene basis. "We segment the videos into shots, we analyze the video per shot," said the company's director of video algorithms Anne Aaron.
Now, an action scene in a show may stream at a higher bit rate than a scene featuring a slow monologue - and users with limited bandwidth are set to save a lot of data. A few years back, 4 GB of mobile data would get you just about 10 hours of Netflix video, said Aaron. Now, members can watch up to 26 hours while consuming the same amount of data.
Netflix video encoding advancements: New technology allows the company to stream videos at the same quality with less than half of the data previously used.
Netflix previously re-encoded its entire catalog on a per-title basis, which already allowed it to stream animated shows at much lower bitrates than action movies with a lot of visual complexity. The next step for the company will be to adopt AV1, an advanced video codec developed by an alliance of companies that also includes Apple, Amazon, and Google. Aaron said Netflix could start streaming in AV1 before the end of this year, with Chrome browsers likely being first in line to receive AV1 streams.
Why Netflix almost never goes down. The company's service achieved an availability rate of 99.97% in 2017, according to Netflix engineering director Katharina Probst. Part of that is due to the fact that Netflix learned from outages early on, and now uses Amazon's AWS data centers across three regions. When one of those regions does go down, Netflix automatically redirects all of its traffic to the two other regions.
In fact, the company even tests this fall-back regularly by just taking a region offline itself - something the company calls chaos engineering. "We intentionally introduce chaos into our systems," explained Probst. Up until recently, it took Netflix up to an hour to successfully redirect all requests in case of such a massive failure. More recently, the company was able to bring that time down to less than 10 minutes.
Netflix knows its subscribers better than they do. Netflix is famous for doing a ton of testing, but the company is also conducting thousands of in-person interviews with members as well as people who haven't subscribed yet every year, according to its VP of consumer research Adrien Lanusse. Except, sometimes, consumers don't tell Netflix what they actually want.
Netflix now produces originals around the globe - and streams them to U.S. audiences dubbed.
One example: During those interviews, U.S. consumers overwhelmingly told the company that they wanted to watch foreign originals with English subtitles. However, the folks at Netflix weren't so sure that was true, so they streamed a dubbed version of the French show "Marseille" to a subset of its viewers by default. Those who got the dubbed streams were more likely to finish the series than those who watched it with subtitles.
That's why Netflix is now streaming dubbed versions of shows by default, while still letting users switch to the original with subtitle at any time. Consumers seem to like it, no matter what kind of notions they might have had about dubbing: In the U.S., the majority of viewing of the German drama "Dark" as well as the Brazilian sci-fi show "3%" happened with dubbed audio, according to Netflix's international dubbing manager Denise Kreeger.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
