The novel coronavirus pandemic is creating new challenges for physical supply chains, and it's also putting a strain on internet-communications channels. With people staying inside to help stem the spread of the virus, data-intensive streaming has gone way up, and top services are making shifts to adjust to the new circumstances.
Netflix (NASDAQ:NFLX) reduced its streaming bitrates in Europe on Thursday, and Reuters reported on Friday that Alphabet's (NASDAQ:GOOG)(NASDAQ:GOOGL) YouTube would also be making changes to cut down on data usage. YouTube is now defaulting all videos in the EU to standard definition, and it's expected that both streaming-video platforms will keep measures in place to reduce bandwidth usage for at least the next 30 days. Netflix's move to reduce bitrates rather than resolution means that users will still be able to stream in 4K, but video quality could become choppier and more pixelated.
Streaming-quality downgrades in the U.S. might be next
Many businesses are increasingly relying on teleconferencing as employees work from home, and the rise of work-related video usage combined with increased engagement with film-and-television streaming suggests that U.S. internet infrastructure could be pressured. Engagement for some other forms of online entertainment has also seen a dramatic boost, with Verizon stating that video-game-related traffic on its network has risen by roughly 75% following the novel coronavirus outbreak.
Netflix and YouTube combined account for a large share of peak-hours internet bandwidth usage in the U.S. With growth for 4K streaming and more people staying at home due to COVID-19 concerns, the total bandwidth use for leading entertainment platforms is likely at an all-time high. It wouldn't be surprising to see some manner of image-quality-reduction measures implemented for streaming-entertainment services in the U.S. and other territories outside Europe.