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3 reasons why Netflix’s latest move is so brilliant

jessica jones netflix season one
Krysten Ritter in Marvel's "Jessica Jones" on Netflix. Myles Aronowitz/Netflix

On Monday, Variety's Janko Roettgers gave us an in-depth look at how Netflix engineers have found a way to bring its subscribers higher-quality video while at the same time reducing the amount of data it takes to deliver it.

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Streaming HD video uses up tons of data, and Netflix is one of the biggest companies responsible for it. In fact, on a typical evening in North America, Netflix accounts for a whopping 37.1% of all downloaded internet traffic, according to Sandvine, a company that makes equipment for internet providers.

So while you might not notice much of a difference on the surface, Netflix's move is quietly brilliant.

Here's why:

It's good for people with slower connections to the internet.

Netflix is aggressively expanding outside of the US. The service is currently available in more than 60 countries, and the company aims to be in every country in the world by the end of 2016.

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But broadband speeds around the world vary. For example, 93% of people in Denmark have speeds above 4Mbps, according to the cloud services provider Akamai, which is just above what Netflix recommends if you want to watch a movie or TV show in standard definition. But only 18.7% of people in China have broadband speeds above 4Mbps.

Netflix needs to be more accessible to people with slower internet speeds if it wants to be able to attract large numbers of people in other countries.

Decreasing the data but improving quality will allow people with slower internet connections to have better experiences watching Netflix, which makes the service appeal to a larger group of people.

It's great for wireless connections.

People are increasingly watching video on their smartphones and tablets. For many people, their only broadband connection is their phone. But wireless data is really expensive, and video, of course, uses a lot of it, so any changes Netflix can make to decrease the amount of data its videos use is great. 

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This will be welcome when broadband providers start charging for usage.

In the US, most people who have broadband connections can stream as much video as they like without worrying about getting charged more. But that could change soon. Comcast is testing plans that charge people based on how much data they use, just like wireless carriers do.

And as people shift their viewing to online services like Netflix, HBO Now, Hulu, Sling TV, and more, and watch less traditional TV, cable companies will be likely try to make up losses by increasing broadband fees. Netflix's new technology will make sure you can continue to stream a lot of video without worrying about going over your data cap.

Be sure to check out Roettgers' story on how Netflix engineers were able to make this happen.

Disclosure: Mathias Döpfner, CEO of Business Insider's parent company, Axel Springer, is a Netflix board member.

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