Please ensure Javascript is enabled for purposes of website accessibility

Here's Another Netflix, Inc. Internet Speed Tool. Thanks, but Why?

By Anders Bylund - May 19, 2016 at 9:25AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Spoiler alert: Fast and dependable Internet connections are absolutely critical to the company's success.

Netflix (NFLX 1.98%) sure cares a lot about your online connection speed. The company is also very interested in making sure that you know exactly how good your Internet hookup is -- or isn't. This interest in speed measurements is bordering on obsession nowadays.

But it's all for good reason. Rest assured that there's a business purpose behind all of this speed-testing stuff.

Launched: Fast.com

On Wednesday, Netflix introduced a brand new tool for testing online connection speeds. Go to Fast.com, and you'll immediately see the system measuring your connection speed:

The whole Fast.com experience. No, the Netflix logo in the corner is not clickable.

The tool is a microcosm of Netflix's design philosophy:

  • The measurement starts right away, with no need to click on any "start" buttons. This reminds me of the way Netflix shows start streaming in the background before you hit start, triggered by your mere interest in that title.
  • The interface is free from advertising, additional data, and other distractions. Learn your current download speed and then get out. The streaming catalog tries its hardest to achieve the same effect, but that's a much more difficult task. So the company settles for presenting the shows and movies you seem likely to enjoy, as close to front and center as possible.
  • A link to competing test service Speedtest.net is the only clickable item on that page, apart from a simple retest button and a short Q&A list. You may have noticed that Netflix CEO Reed Hastings is quick to praise his competitors, often pointing out how much he admires what HBO or Amazon.com are doing. Some of that admiration is probably genuine, but the cynic in me can't help assuming that Hastings wants you to check out the other guys, and then come back to the superior Netflix experience with newfound fervor. Likewise, there's nothing wrong with Speedtest -- but that tool is cluttered with lots of stuff you don't want in a simple speed measurement. Fast.com looks pristine by comparison.

More data, but also more clutter. Which tool do you prefer?

Netflix's other speed tools

Fast.com is not Netflix's first foray into online speed measurements, of course. The company has long been publishing average streaming speeds per country and Internet service provider. This data is culled from Netflix's internal measurement of individual content streams, and the figures are much lower than the scores you'll see from Fast.com. Ideally, your full-speed connection should have room for several high-def Netflix streams at once, with extra space left over for other online tasks.

Netflix also runs its own content-publishing network, known as Netflix Open Connect. The company builds custom hardware boxes with tons of storage space, stuffs them full of licensed digital video content, and sets them up to pull down data updates at low-traffic hours.

These boxes are connected as close to the Internet backbone as possible. This is done either in interconnection data centers, or even better -- in your Internet service provider's own facilities. The interconnection locations are sprinkled across the globe, from Hong Kong and Stockholm to Dubai and Johannesburg.

This model lets Netflix serve up gigabits of video data at high speeds without bogging down the long-distance Internet backbone. Here, Netflix is simply going out of its way to boost the customer's network experience.

This is also where Fast.com connects in order to get its testing process started, which makes it the closest-possible approximation of your true connection speed to Netflix services. If Fast.com consistently shows you high numbers, but Speedtest's results are way below your expected data speed, that Open Connect appliance is saving you from bottlenecks elsewhere on the network.

Together, these tools give Netflix customers a reasonable shot at accessing high-quality data services, and offers all the data you'd need for choosing the right provider in your area. That makes it easier to jump ship and find a new provider if your current one isn't up to par.

This is Netflix keeping networking providers on their toes. That seems to be necessary every once in a while.

The bottom line

This stuff is important to Netflix because its digital-streaming services are worth more when paired with a strong connection. You'd be much more likely to cancel your Netflix account if the videos started stuttering, buffering, or not loading at all. And there's no way Netflix could convince you to upgrade to its ultra high-definition package if the standard plan barely works.

The company works hard to keep those digital streams flowing as smoothly as possible. Fast.com is just the latest punch in that never-ending fight.

And that's how Reed Hastings is making sure that subscribers around the world get the best possible Netflix service. This tool was not published out of the goodness of Hastings' heart, but to boost his own business prospects. It just looks like a nice little giveaway.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$195.19 (1.98%) $3.79

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
344%
 
S&P 500 Returns
120%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.