Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

YouTube, Amazon Prime forgo streaming quality to relieve European networks

Published 03/20/2020, 03:22 PM
Updated 03/20/2020, 03:05 AM
© Reuters.

By Foo Yun Chee

BRUSSELS (Reuters) - YouTube and Amazon Prime will sacrifice streaming quality in the EU to help avert internet gridlock as tens of millions of Europeans, confined by the coronavirus outbreak, switch to working from home.

Alphabet Inc's (O:GOOGL) YouTube and Amazon (O:AMZN) joined Netflix (O:NFLX) in responding to a call by European Union industry chief Thierry Breton to cut picture quality to prevent overload.

While mobile networks are coping so far they could come under increased pressure as lockdowns to slow the pandemic become stricter and broader.

Streaming video can account for 60% or more of traffic on fixed and mobile networks and the planned March 24 launch of Disney+ (N:DIS) in Britain, Ireland, France, Germany, Italy, Spain, Austria and Switzerland could create a new pain point.

Carriers have been told by the EU not to prioritise traffic as this would violate its net neutrality rules.

"We are making a commitment to temporarily switch all traffic in the EU to standard definition by default," YouTube said in a statement after Breton spoke to Alphabet CEO Sundar Pichai and YouTube CEO Susan Wojcicki.

A spokesman said the decision includes Britain, which is leaving the EU, and will initially be for 30 days. Breton welcomed YouTube's step.

Amazon Prime followed suit on Friday, saying it supported the need for careful management of telecom services to ensure they can handle the increased internet demand with so many people now at home full-time due to COVID-19.

"Prime Video is working with local authorities and Internet Service Providers where needed to help mitigate any network congestion, including in Europe where we’ve already begun the effort to reduce streaming bitrates whilst maintaining a quality streaming experience for our customers," a spokesperson said.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Disney , which has 28.6 million users, had no immediate comment. It is already sending out teasers for a launch that will feature the opening two episodes of 'The Mandalorian' and the final season of 'Star Wars: The Clone Wars'.

Experts warn that reducing streaming rates may only give temporary relief and the dilemma of whether to discriminate between essential and non-essential traffic will resurface.

"In an ideal world, network operators would obviously upgrade their infrastructure and invest," said Eric Broockman, chief technology officer of Extreme Networks (O:EXTR), a U.S. network management company.

"In the short term, what network operators could do to reduce the pressure on their networks and ensure connectivity for all is to deprioritise non-essential traffic."

DATA SPIKE

Telecoms providers from Vodafone (L:VOD) to Deutsche Telekom (DE:DTEGn) have reported a spike in data traffic, forcing Breton to issue his pre-emptive call.

He wants networks to be able to run essential services such as healthcare and online learning for house-bound children during the coronavirus outbreak.

Netflix said it would reduce bit rates, which determine the quality and size of its audio and video files, across all its streams in Europe for 30 days, in effect cutting its traffic on European networks by around 25%.

Orange (PA:ORAN) CEO Stephane Richard called in an interview with Le Figaro for the Disney+ launch in France to be delayed so as not to overload networks.

But Deutsche Telekom said it was sticking to its launch plans in Germany, where it is offering Disney+ for free to subscribers to its Magenta TV product for the first six months.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

In Austria, which has imposed regional lockdowns in areas hardest hit by the coronavirus, Drei Austria said it was seeing a 50% increase in voice telephony and 15% in peak data loads.

Drei, a unit of Hutchison (HK:0001), welcomed the moves by Netflix and YouTube. While it had not yet made use of traffic management measures, it said it would keep that option open.

"We hope that Disney, like Netflix & YouTube, will also reduce its transmission quality, at least during the crisis," Drei told Reuters.

Not all networks are stretched, with Dutch cable operator VodafoneZiggo saying it had ample capacity and was offering its paid film channel, plus a kids film and a comedy channel, for free.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.