Netflix, Inc. (NFLX) 4K Challenges Explained

Netflix, Inc. (NASDAQ:NFLX) is tackling quite a few challenges on its road to rollout 4K ultra high definition content, the company’s chief product officer, Neil Hunt, explained in a discussion with The Wall Street Journal’s Wilson Rothman at the sidelines of the Consumer Electronics Show.

Netflix, Inc. (NASDAQ:NFLX) began streaming 4K content during the second quarter of 2014 with its original series “House of Cards”. However, the content was only available on specially-equipped television sets and fans of 4K streaming have been clamoring since for more content to be available in the very high definition standard.

Ultra high definition or 4K content refers to the size of images in pixels in a stream. Full HD or 1080p content has images with 1920×1080 pixels while 4K has 4096×2160 pixels images.

According to Hunt, one of the changes Netflix, Inc. (NASDAQ:NFLX) made to its systems to enable 4K streaming was to switch from the h.264 encoding to High Efficiency Video Coding (HEVC) h.265 encoding which he says is a little bit more efficient therefore not taking up as much bandwidth to stream.

He also said that Netflix, Inc. (NASDAQ:NFLX) improved its adaptive streaming technology to give subscribers a seamless transition to 4K content. Using adaptive streaming, watchers may start viewing content via a high-definition 720p stream and then to a 1080p stream as the system loads the 4K content.

Hunt also acknowledged that to see 4K content, subscribers also needed to have television sets with built-in HEVC h.265 decoders. However, he said that all 4K television sets launched last year have h.265 decoders.

He noted that more people are buying 4K televisions, another barrier to the 4K content rollout, and that more content are being produced in 4K. The company is admittedly starting with in-house Netflix shows but Hunt said that they have been in constant contact with content makers to talk about the possibility of shooting in 4K.

Carl Icahn’s Icahn Capital LP owned about 1.41 million Netflix, Inc. (NASDAQ:NFLX) shares by the end of the third quarter of 2014.