Why Do Streaming Services Charge Extra for HD and 4K?

Most services offer SD and HD video at different price points. But with the availability of 4K, is this price disparity fair? Should services treat different video resolutions like different products?

Most Streaming for HD

Despite the rise of 4K video and high-speed internet connections, streaming services are still hung up on the difference between standard definition (SD) and high definition (HD) video nevermind 4K! In fact, many streaming services, like Amazon, YouTube, and Vudu, treat SD and HD video like two different products, selling SD and HD digital copies of the same movies at different prices. Heck, even Netflix handles different resolutions like different products the “Basic” Netflix plan doesn’t come with 1080p streaming. 4K is even more expensive!

Now, this practice is pretty easy to overlook. It’s been going on for a long time, and plenty of people are happy to “save” a dollar or two by purchasing SD content. But are streaming services doing you a favor by offering low-resolution video at a discount? Are these companies paying extra to store and deliver SD copies of movies? And with the current popularity of 4K, shouldn’t we think of HD video as the baseline for video streaming quality, and 4K as the extra-cost upgrade?

This Isn’t Like DVD and Blu-ray

When Walmart stocks its shelves with DVD and Blu-ray copies of Toy Story 3, it has a good reason to sell those different copies at different prices. For one, Blu-ray discs are more expensive to manufacture than DVDs. Not to mention, both products take up shelf space, and the shelf space for Blu-ray discs is (at this point) more valuable than the shelf space for DVDs.

People try to carry this logic over to digital streaming services, but it doesn’t hold up. Sure, the storage centers that are used by streaming websites could be thought of as shelf space, but streaming services don’t store SD and HD copies of video as different products. Even if you’re paying for HD, you might get SD to prevent video buffering.

Remember video buffering? It’s a lot less common than it used to be. That’s because every streaming service keeps SD and HD copies of their library so that, when your internet connection takes a nosedive, you can seamlessly switch to a crappy low-resolution video and avoid the buffering screen.

YouTube Doesn’t Have Trouble Storing Video

Let’s compare YouTube (a free streaming service that offers 4K video) to our favorite premium streaming websites. For every minute that passes by your short little life, about 500 hours of video are uploaded to YouTube (you can observe this in real-time on everysecond.io). Do a little math, and that comes out to about 30,000 hours of new YouTube content every hour. For comparison, the entirety of Prime Video’s 2017 library clocked in at just 19,200 hours.

Clearly, YouTube uses a lot of storage space. But here’s another thing to consider. In a fascinating Computerphile video from 2013, a group of bright-eyed YouTube employees explain how every single video on YouTube is copied into “more than a couple dozen” file formats and video resolutions (1080p, 720p, etc.) to ensure the website plays nice with any device at any connection speed. When coupled with YouTube’s ridiculously huge library, this practice requires a ton of storage space.

Do premium streaming services copy files to this extent? Not even close. All modern browsers support a few ultra-popular (and highly compressed) video encoding methods, like HTML5, H.264, and WebM VP8. Naturally, most (if not all) premium streaming sites stick to these popular formats.

Storage space isn’t a good excuse for the price disparity between SD and HD videos on streaming services. If YouTube can offer 4K video for free in spite of its ridiculous storage needs, then why does Amazon charge people $1 extra to watch Toy Story 3 in 1080p? In fact, why does Netflix offer different prices for premium SD and HD content? If you can watch a 4K unboxing video on YouTube for free, then why do you have to pay extra to watch movies in HD on paid streaming services?

Content Delivery Isn’t Much More Expensive

Premium streaming sites can’t use storage and web hosting as an excuse for selling SD and HD video at different prices. Maybe it just costs more for websites to deliver HD video to customers, so they offer SD video at a reduced price. That makes sense, right?

Of course not. Streaming services operate over Content Delivery Networks (CDNs) and Open Connect Appliances (OCAs), which significantly reduces the cost and difficulty of HD content delivery. These terms sound very abstract and dense, but they’re really quite simple.

Internet traffic is like regular traffic. If everybody tries to take one road, then they’re going to create a traffic jam and move very slowly. The same thing happens on websites. To combat this problem, streaming services build CDNs. A CDN is a dense, global network of servers that all contain the same content. They’re like different roads to the same destination. This way, Netflix doesn’t come to a standstill every time a new season of Stranger Things comes out.

OCAs are similar to CDNs, but they’re built to prevent traffic jams on the entire internet, rather than just a single website. Like OCAs, CDNs contain an extensive library of videos, and they’re spread around the globe. The big difference is that CDNs are operated by your internet service provider. When your entire neighborhood goes to watch the new season of Stranger Things, your ISP will redirect that internet traffic to a CDN, which keeps non-Stranger Things fans from experiencing any internet traffic jams.

Obviously, these CDNs and OCAs cost a lot of money to maintain. But they’re what you might call “internet infrastructure.” The investment’s already been made, so the cost of delivering HD content instead of SD content is negligible at best. Yet some premium streaming services still want to charge you different rates for SD and HD video, and they’re still behind the ball on 4K.

Is Content Licensing to Blame?

Streaming services don’t have a real excuse for the price disparity between SD and HD video. They’re already storing each video in multiple resolutions, and content delivery hardly costs them a penny.

It’s hard to tell precisely why streaming services are selling SD and HD videos at different prices, but the weird relationship between TV networks and streaming companies could be the answer. In a Reddit thread from 2016, a group of confused YouTube users complained that some of the HD shows and movies sold by YouTube are only stream-able in 480p (not HD at all). As it turns out, some of these shows and movies came with a tiny disclaimer, stating that “HD viewing isn’t available on web browsers.”

Why wouldn’t HD be available on web browsers? Well, one of the shows in question is Silicon Valley, which is owned by HBO. It’s possible that YouTube bought the rights to sell HD copies of the show for mobile devices, but wasn’t allowed to purchase the rights for HD web streaming. After all, why would people subscribe to HBO GO if they can just watch Silicon Valley in HD on YouTube?

It’s also possible that this weird business practice extends to other services. Netflix may have to pay extra to get the HD license for Friends, and Amazon may have to pay extra to get the HD license for Toy Story 3. 4K content is likely even more expensive to license!

Is this a stupid excuse? Of course. Streaming services and TV networks are treating different video resolutions like different products, and they’re leaving consumers to deal with the mess. What’s so ironic and frustrating about the situation is that these companies are so caught up in their own nonsense that they’re ignoring the booming 4K video market. 108-million people are expected to buy 4K TVs in 2019, don’t you think they’d pay $2 extra to rent a 4K copy of your movie?

Will Everyone Charge Extra for 4K?

Some people would be willing to pay a dollar extra for 4K video. If you splurged for a nice-looking TV, why would you pinch pennies when it comes to the content?

At least 4K is new and shiny. Paying extra for HD video vs. low-resolution SD video in 2019 seems silly. If HD replaced SD as the “discounted” video resolution on streaming sites, we’d be happy. Kind of.

It’s hard to let go of the fact that YouTube offers free 4K video in spite of its storage costs. If YouTube can show 4K video for free, then why should we pay extra for 4K video on premium streaming platforms?

Not Everyone Charges Extra for 4K

As of right now, the future looks decent. Google Play, YouTube, and Apple offer 4K as the standard (and only) video resolution for a handful of movies and shows, and Amazon is trying its best to provide 4K video to Prime subscribers for no extra cost. But at the same time, these services are still guilty of creating a price disparity between SD and HD content, and Netflix only offers 4K video for its highest-paying subscribers.

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