Building Netflix Australia: How Netflix Is Gearing Up For The Land Down Under

March 24. That's the day Australia can stop pining and start enjoying Netflix without the use of a VPN or hacked connection. But how did we get here? How did the boffins at Los Gatos -- where Netflix is based -- turn on the Australian region? It's more than just the flick of a switch, so to find out exactly what's involved, we went to the heart of Silicon Valley in California to discover how Netflix Australia was built.

Socket To Me

"It's relatively straightforward," says Neil Hunt in his charming British accent. That might be easy for Netflix's chief product officer to say, but there's actually a lot of work to get done in a short amount of time. Neil and his team are like US Navy SEAL teams, but for tech: the crack experts who probe a country for problems before Netflix launches, and come up with ways to jump over whatever hurdles may present themselves in the process.

Neil breaks the job of launching a new region down into a few different categories: "There are the challenges of new catalogues, new payment vehicles and bank relationships, and then of course the Open Connect team has been working to secure the appropriate connectivity to the ISPs and that's looking very good [in Australia]," he explains.

Open Connect is a program that sees Netflix team up with ISPs around the world to more efficiently deliver streaming content to viewers over DSL connections. Netflix partners with hundreds of ISPs around the world to route traffic more efficiently, and embeds "Open Connect Appliances" at different locations and landing points around the world to boost connectivity with its massive content delivery network.

It needs boxes like the one pictured above to deal with the massive traffic load. According to recent stats, over one-third of the peak internet traffic in North America can be attributed to Netflix, so it has to have a network geared to keep up.

That box does more than just handle traffic, however.

The company will gladly put a box with a copy of itself -- which is to say, nearly the entire catalog of its offerings -- inside your friendly neighbourhood ISP data centre. That way, when your whole neighbourhood is sitting down to watch Netflix after work, it doesn't tax the internet at large, or the hand-off points between different parts of the network. Instead, the deluge of data is confined to the "last mile", that last chunk of network between the local data centre and your cul de sac. It saves everyone a lot of headache, in the US at least.

Think of it like Netflix to the node.

Neil wouldn't tell me who the Open Connect partners are in Australia just yet, but did say that work was well underway with local partners to keep the experience speedy. (We've since learned that iiNet and Optus are partnering with Netflix to offer unmetered access to Netflix content.)

Australia will be streaming its content locally through these Open Connect partners, while core sign-ups and other back-end requirements will be delivered through Amazon Web Services in the US.

Despite the fact that all we do in Australia is complain about slow internet, Netflix is positively beaming about the quality of Australian infrastructure thanks to some clever streaming algorithms and lessons learned in other markets with appalling connectivity.

"Slow internet has always been a challenge. We have slow internet in the US as well. Everywhere else in the world, DSL works a whole lot better than it does here in the US," Neil Hunt says with a wry smile. "Conversely though, we also have some of the highest [speeds] though like Google Fiber and some other providers' cable connections are very good. The performance is varied, so we spent a lot of time getting [dynamic streaming] right."

Hunt explains that because the information being streamed live and real time, the company can find a way to pass three streams at once to a customer.

"Netflix is unlike a phone call or a video conference, it doesn't have to be continuous and uninterrupted. We can build a buffer of two to three to five minutes, deplete that and then build it up again, and we've put a lot of energy into the algorithms to be predictive.

"For example, we know a sample connection is delivering a 2Mbps throughput continuously. That's typical for a DSL. With that we can deliver a very nice 1.5Mbps standard definition, DVD-quality picture and it's all encoded in a variable bitrate. But on someone else's connection like a Fixed Wireless connection where there are peaks [of bandwidth] and then gaps with nothing at all, we can know to be more conservative and have more headroom on that connection with the upcoming peaks.

"Latin America is a region, for example, that's a lot more challenging than the Australian market. Lots of very distributed, poorly performing infrastructure. There's lots of room to improve there but I have no concerns about the Australian market," he says as he confidently leans back in his chair, knowing that all of this has happened before, and all of it will happen again.

“It’s relatively straightforward,” says Neil Hunt in his charming British accent. That might be easy for Netflix’s chief product officer to say, but there’s actually a lot of work to get done in a short amount of time.

As we spoke, Neil's team was working hard to put an historic region into play, in the form of Netflix's entry into Cuba. Cuba is a country locked in the past following the US trade embargo. Now in the winter of his Presidency, US President Barack Obama is looking to bring Cuba back towards the US. Netflix saw the opportunity to launch there, and did so a few days after this interview was conducted. I spoke to Neil again about the challenges when Cuba finally launched and how easy it makes building Netflix Australia in comparison.

"When we built out our service to launch in Cuba, it took us one week to build. We had to set up a new catalogue and set up some rights. [By comparison] in New Zealand and Australia we have to set up bank relationships so that takes a bit of time, maybe a month or two," he adds.

It's Neil's job to solve any and all problems that get thrown up in front of Netflix on its way to launch. It announced the decision to go global this year, which is massive for everyone who works there. You see the challenge in their faces when you ask them about it.

Netflix is a company that gets its own way, and you can see that in the way that everyone in the HQ bloody-mindedly pursues the company's agenda. When Netflix first came down to Australia and we spoke to content and marketing staffers, we asked them what happens if there's an unexpected delay to the March launch which would force them to push it into April.

"It won't happen. We will launch in March," one of the staffers told us. It's like every single one of them has Dr Ian Malcolm in their heads on a treadmill chanting "life finds a way". And that's a good thing: a streaming provider tweaking itself endlessly to make the customer happy and keep them streaming awesome new content? Why wouldn't that be a good thing?

Once Netflix launches, Neil and his team go into maintenance mode. The company starts learning about the customer in order to recommend content to them better.

Make no mistake: Netflix is a technology company before it's an entertainment company. It may be transitioning into an entertainment company with its Emmy Awards, exclusive deals and star power, but at the end of the day, Netflix is a salad of clever algorithms with a side of user tests running to figure out how to better serve content to a customer.

That's where Todd Yellin comes in.

Watching Netflix Watching You

Todd Yellin is the VP of Product for Netflix. Everything that "touches" a customer is his responsibility. From the second they sign-up for Netflix and take the quiz asking what sort of movies they like, right through to when they're binge watching the third season of the award-winning House Of Cards, and everything in-between.

Speaking of House of Cards, Yellin does not look unlike the show's fierce fixer, Doug Stamper, only with a far less menacing demeanour. He's whip smart, super-smiley and has been at the company for almost a decade. His fingerprints as well as the fingerprints of his team are all over Netflix. Many of the platform's key features came straight out of his head.

He was the one who built and maintains the dedicated Kids section that everyone gets access to, and he's the one who obsesses over metadata. Not the scary metadata George Brandis wants, but the metadata that shows users Funny Romantic Movies or Gritty Action Westerns. It's this obsession over metadata, user data and test data that keeps the algorithm fresh and recommending new content.

I spoke to Todd a little bit about the user data and how it slowly changes the way Netflix looks, works and serves content to viewers, and right from the word go you can tell he has one of the most fascinating minds of anyone you'll meet.

"When I first started at Netflix nine years ago, we thought age and gender [were two demographics] that mattered a lot," he tells me while discussing what happens when users first join up to Netflix. "We used to collect people's age and people's gender and we would figure that an older crowd would be into one thing while we'd throw stuff like action and like Marvel Comic superheroes to 17 year old males.

"Then we learned soon after that it doesn't really work that way. We stopped using age and gender two years after we launched it. Play one title and we'll know more about you and gather much more interesting information that we could if we just got your age and gender," he reveals.

"[A user's] geographic location is not as important as the type of content they're passionate about. It's much more interesting to find out someone's interested in romantic comedies than to find out that they live in Sydney versus New York City. You might have something more in common with someone 7000 miles away than you do with your next door neighbour 20 metres away," he said.

Every decision you make about what to watch or what to rate, and more importantly what not to watch, is stored in your user profile.

"What we tried a couple of years ago was giving everyone that profile for themselves. That worked really well so now each accounts gets five profiles, as well as an automatic Kids account," says Todd.

No two Netflix accounts will look identical, the product-obsessed VP tells me. Everyone likes different things, and Netflix's algorithm throws up new stuff for every taste.

The key to keeping it all organised and showing where you're up to is in the Recently Watched bar, and that's one of the first things customers will see when they log into the service.

Right now Todd is watching The Fall ("I'm trying a few episodes of that"), The Trip To Italy ("I was watching that this morning before work") and Maron. Both of those are in his Recently Watched, and everything below that row is then personalised based on his profile.

Awards season is always interesting for Netflix, simply because it decides whether or not to push a "Critically Acclaimed" row to users. According to Todd, most people like to think for themselves.

"You might never see a 'Critically Acclaimed' row. Only around 20 per cent of people are really into following what critics say. They're really passionate and really sensitive to it so we give them a 'Critically Acclaimed' row, but [for] others we won't," Todd says.

Every little feature, button and piece of text has a place in the Yellinistic world of Netflix. When you look at the service, nothing is put there by accident. You can point to anything on the UI and he'll be able to tell you not only why it is where it is, but also what they've tried and failed to replace it with.

"Look at all the images here," he exclaims, pointing at the rows of titles on Netflix. "We've tested it with one image [on a row], we've tested it with five. We really want to make it so that we're picking the right stuff to make it very simple and straightforward. Even little stuff like how many characters we use in synopses and how many words, or how they're presented. Or the fact that we're using horizontal images now and not vertical. [These decisions] make it better and easier to choose movies and TV shows," he said.

"We've actually tried pushing the envelope a bit and getting rid of all text. That was a disaster. People do read on the internet, it's just finding how much," Yellin adds sheepishly. Something tells me he doesn't like to be wrong a lot of the time.

All of these insights about what to put where come from Netflix's obsessive data analytics and consumer research teams, stationed inside its Los Gatos HQ. It's their job to find out which levers need to be tweaked to get Netflix working better for customers. They'll do user experience trials, content taste trials and even trials on when, how and where people watch.

When Netflix was in its pre-launch phase in Australia, they sat down face-to-face with Aussie consumers and talked to them about their content habits. A few expressed that Netflix appeared to be too difficult to use, but a quick inspection showed that the same people had hard drives connected to their TVs and home entertainment gadgets, so clearly an on-demand streaming service couldn't be that tough to fathom.

"There's particular talent in Australia that isn't known globally. You guys have exported some amazing actors that we know in Hollywood...Chris Lilley is one. Someone like Chris Lilley when we have that content on Netflix we don't know it because that's a particular Australian choice," Todd Yellin admits.

All these challenges needed to be addressed before the switch could be flicked to bring Netflix to Australia.

Once the service is launched, Netflix starts learning about Australia and what we watch in order to serve us better.

Todd explains:

"When we go to a country, we've found its more important to understand if you like really gory action and romantic comedy or sappy romantic comedy or more serious romance, that kind of thing to understand is something we've built up in our data and our algorithms for a while now, so launching in Australia it's not like we're doing it completely from scratch.

"We've learned over a long time what people who like edgy independent content or more global cinema, what they tend to like and what they'll tend to like after their first play, rather than just start it up cold and start building [new user insights].

"There are some subtleties, however. There's particular talent in Australia that isn't known globally. You guys have exported some amazing actors that we know in Hollywood...Chris Lilley is one. Someone like Chris Lilley when we have that content on Netflix we don't know it because that's a particular Australian choice. But most stuff -- like UK cinema, Hollywood movies and Australian content -- we already know. Other stuff we'll learn quickly."

Coming Soon...

Like it or not, Netflix is coming to the weird island on the bottom of the Earth, so that the millions of people who screamed for it for months will be happy. In three weeks, Australia will have more decent streaming services than it has had in its history, and we'll be there to cover it.

Over the next fortnight we'll bring you exclusive interviews with the CEO of Netflix, Reed Hastings on his thoughts on the NBN and launching in Australia; Netflix's Chief Content Officer, Ted Sarandos, about Aussie content and changing Netflix from a tech company to an entertainment company; and a look inside the lavish Los Gatos HQ Netflix staffers enjoy.

Eric Limer also contributed to this piece.

Luke Hopewell travelled to Los Gatos as a guest of Netflix.

WATCH MORE: Entertainment News


    I figure they wouldn't need that many servers or datacenters to get Netflix up and running in Australia. After all, you just need to stream content in 320x240 to ensure people don't tie up their dial up internet connections.

    If the NBBN (National Broad Band Network) makes it off the ground, you might have to install a second Netflix box in a datacenter somewhere to allow for what will essentially be the speed of TWO 56k modems. Such speeds are unheard of, here in Australia.

      If this is your best material, don't give up your day job.

        And maybe you should quit yours.

        Oh, so you're one of THOSE people who have a fast internet connection right? Download MP3s and stuff in less than an hour? All high and mighty, browsing four webpages at ONCE?

        ...what's it like?

          It's awesome actually.

            So the first thing people need to do when they get Netflix, is watch some Monty Python.

            "You've.. you've done it, haven't you? You've.. slept with a lady, right?"
            "Yes. What's your point?"
            "... what's it like?"

          I am not sure whether to be proud or ashamed that I got that reference instantly.

      Lol. Love it.
      Tonys Local narrowband network ftw

    Netflix customers in Australia will be streaming their content from Amazon’s data centres in the US rather than in Australia, simply due to the cost.

    Lets put the cost to one side and talk about that the service will be coming from a US data center. I am going to guess here, will this be a dedicated server for just the Australia region?

    Last edited 05/03/15 3:25 pm

      I doubt it, why would they do that? Doesn't seem efficient at all.

    Hmm.. you know what.. I just wish some of the FTA moguls would watch that video and begin not to look at the "lowest common denominator" idea. . Maybe they might see finally that they are doing it so wrong.

    If the content is all coming from the US servers then that keeps alive the possibility of all Netflix traffic being unmetered on iiNet & Optus (i.e. even for those already streaming Netflix from a US account and not just for those who sign up to Netflix in Australia)

      Maybe the ips will point their systems to the ip of the server that is for the Australian region and tell their system not to meter it.

      I'm sorry but unfortunately that's impossible for the ISPs to achieve. As far as I am aware (not a Netflix user personally) the people who are using US Netflix accounts are using VPNs to redirect their traffic through an American internet connection. Correct me if I'm wrong. But as a result of that, unless the ISPs were to analyse the traffic, there would be no way to distinguish whether you were using a VPN to watch US Netflix or just downloading something from a US server.

        I use a DNS reverse proxy, unblock-us, which I believe only effects the IP check. Once that is done then the stream itself comes direct from Netflix. That's only my understanding though.

          If you are using a VPN the data would be counted.

          Just about everyone uses a DNS redirector. It catches the "country check" request and routes it through to America. The rest streams straight to you direct from Netflix. So a few kb might get added to your quota for the geographic check.

          Although - they may have others ways to measure the data. It could stream to Australia from a certain IP range only or have certan subdomains behind the scenes that serve our region.

      Did you read the article the appliancee box has a copy of nearly the entire catalogue and will be located in the ISP's data center. That means the majority of contented will be served locally within Australia. The only part of the Australian service that is served from amazon data centers in the us will be the account registration.

    Now I can watch what I want when I want legally in Oz (I've been streaming Netflix from the US for months already though). I havent watched FTA TV in ages, I cant even stand more than 2 minutes of FTA TV these days. They have nothing but "reality" shows . I want to watch something more intelligent than that.

    Will Netflix have every movie that is released and will those movies be on Netflix as soon as the cinema run is over?. Will it have every TV show as well? If not, I'm not interested. I want to go to one place to get everything much like I get on pop corn time.

      You will not find a service like that. There is not a single legal service like it. Your best bet will be Stan+Netflix+iView+Presto+AnimePlus but even then you won't get everything.

      I wish I could, but it's not happening, content creators refuse. It hasn't got a thing to do with the providers.

      And quite frankly, what Netflix will have will be totally unmetered with my ISP so whatever it is I'll be watching I'll be watching shit tonnes of it without fear or fault.

      That's good enough.

        Well that's a bit stupid isn't it. I can go to a video store and get any movie and I can also go to the play store and get any song. Why can't these film studios set up a digital version of a video store.? Isn't that just common sense and what the world needs right now.

          Exactly. It's common sense. But not to a film studio. Their business model doesn't fit with online streaming. Where's the money made selling food at huge markups? Where's the advertising your audience has to sit though for 5/10 minutes? I completely agree that a Netflix with everything would be awesome. But it ain't happening. Look at HBO. They're doing their own streaming service just for HBO content. And that'll cost US$15/month. Face it. What you want is a cable video service, just on-demand. And that would be great, if it wasn't for the cost.

          So I'm gonna stick to my handful of services, watch them all compete, enjoy all the original content Netflix creates. Invest in the new shows Hulu carries, jump into Stan for a new movie every now and then, fall into AnimePlus for all my anime needs and finally collapse at iView for the news before bed. At AU$30/month, 95% of all the content I watch is good enough.

            Try pop corn time. Their anime selection is quite extensive.

              I'm fully aware of popcorn time, however, the services in mentioned allow me to pay/compensate the creators, even if only minutely. I'd rather support services, prove their business model is what I want, and thus cause the industry to evolve as a whole.

          I don't what video store you're going to but I've never seen a video store that has EVERY movie. It probably has most films that come out of Hollywood and most that come out at cinemas in Australia but the range of foreign films in video stores is very limited. No store has every movie ever made, and expecting a streaming service to have every movie is about as stupid as expecting there to be a cheap fuel efficient car that is also a bike, a plane, a boat and space ship..

            Okay, not every movie but all the main ones and the larger stores have a large selection of foreign movies but unfortunately video store are closing due to the ease of hiring movies online.

        I want to know how much content is missing on these services. I signed upto Stan. And already have cancelled.

        I started to put a spreadsheet together to see how much was missing. It did not look good for stan but i would love for people to add to this sheet info on other shows and other service providers. Just to see how bad they are.

        So if people could add to the sheet and lets see how crap the content is or will they come up showing alot of content.

        I post this before and people have been updating it. So lets keep it going

    @luke - enjoyable read mate! Glad you guys aren't shying away from in depth stuff like this on competitors with Allure and it's owners having their own thing going on.

    Looking forward to the followups!

      Thank you, i didn't write it but i'll take credit. ;)

    Enjoying the conversation. However, I presume I along with other chromecast users want to know will our existing chromecast dongles work with Netflix Australia, because they don't at present without some router gymnastics.

    Can your next information piece forcus on this as netflix Australia apparently specifies being Chromecast ready.

      What sort of gymnastics? I cast from my browser using the cast tab extension. Sometimes it drops out when one movie finishes and I start a new one, but I just hit "cast" again and it's fine.

    Why would it not work with chromecast?

      It works for me with Chromecast at the moment. I don't see why it wouldn't work when it's here "legally".

      I think @bowen125 currently has a setup to get around the current geoblock.

      Obviously when Netflix is launched here, there will not actually be a geoblock.

    Easily one of the best articles I've read on Gizmodo. Detailed, insightful and well though out. Well done @lukehopewell . I found this really fascinating, very moorish. :D

    I've been enjoying Netflix for almost 2 years now and it's very very easy. Simply install the "Hola Unblocker" extension for the chrome browser, sign up with a US account (I pay with my aussie credit card) and I can simply switch countries from my web browser (via Hola) and see content from the US, the UK, or any other country Netflix operates in. No payment required to VPN companies, AND, if you sign up now for the USA Netflix, you get the 1st month free to trial the system. Last thing to say, do yourself a favour and buy a Chromecast from Dick Smith!

      How exactly do you stream netflix to your Chromecast?

      I assume a browser window running netflix cast to your chromecast? How well does that work?

    Hi Guys, you are missing the point.
    Getting Netflix through the use of VPN's is no problem. Getting Netflix from your device projected onto your 'big TV screen' via Chromecast is the problem simply because Chromecast's DNS is hardwired as and and then geoblocked . Many users can get around this by changing specifications in their routers, just as many however are unsuccessful.

    My question I suppose can be put another way, will existing Chromcast dongles be no longer geoblocked or newer chromecast dongles sold in Australia have a different hardwired DNS?

    If the geoblock is removed, then it will be much easier to login to the USA Netflix site via a tablet or phone and watch on the 'big screen' via Chromecast.

      I don't know the technicalities here. But if you can chromecast Stan and Presto to your chromecast, I think you can be certain you can create Australian Netflix

      I meant cast, not create

      Why would you change the DNS in your router?

      That's just crazy

      Change the DNS in the internet browser on your PC and cast to the chromecast dongle.

        Because that doesn't work.

    so whats the deal with content. are we going to get the same as the US?
    otherwise it kinda makes this useless. thats why piracy exists because aussies cant access the shows americans can

    If anyone here thinks Netflix (Australia) is gonna be much better than Quickflicks initially, they might be in for a shock, at the end of the day, it all comes down to local studios and what they'll allow on the service, which applies to all the online movies services.

    I'd be sticking with Netflix US for as long as you can if you have that.

      Of course Netflix AU will be better than Quickflicks. For one, Netflix do not charge extra to watch premium content on top of your monthly subscription.

        Not that netflix will launch with much premium content - as it goes forward it might.

    I noticed you have changed the story. Before it was Netflix customers in Australia will be streaming their content from Amazon’s data centres in the US rather than in Australia, simply due to the cost. But now it reads Australia will be streaming its content locally through these Open Connect partners, while core sign-ups and other back-end requirements will be delivered through Amazon Web Services in the US. Why is that?

    Last edited 08/03/15 10:33 am

    Can someone tell? I have fibre to the home and am on fastest speed available 100/40 with iinet would I be able to stream 4k Netflix content on to two devices at same time without constant buffering or delays.

    Let's hope it's better than Stan. Ended my subscription tonight after a week of endless buffering and video quality so poor that I can't see actors' faces. And all on a reliable 8mbps connection. Hopeless.

    That was a really interesting story. +1 to your Journalism stat, giz!

    If it didn't work for Stan why will it work for them? content?

    1: SD movies 720 x 480p on 4K screens that are 50" wide is called "stretching the scaling algorithm pretty thin"

    2: SD movies of "DVD quality" (repeated, synonyms) is 4.7 GB so as 12TB NAS will fit several thousand videos, that box in the picture would be the only box (figuratively)

    3: The One, Single reason why people will Not watch Foxtel / FTA they can record is that because Foxtel and free to air are deciding for you what to see. Yes they are giving you a "pool" in streaming media but that pool is more like just a pond.

    Video On Demand with a HUGE database is the only thing that kicks off the ground in a country with smart people like Australia. If the $ don't work then work on the business model. In my mind I continue to figure this: a server in each continent receiving all terrestrial and satellite FTA and putting them on the internet, just like you listen to internet radio which can tune to 8000 radio stations from around the world, you should be able to watch 8000 TV stations from around the world, and not only their live stream, but stored content that they have already broadcast (missed episodes).

    In the above case, the huge variety available will compensate for the On-Demand issue. I do not Really need to see that Particular movie if I can watch 10 other movies that have all the same 10 characteristics: Genre 1, Genre 2, Genre 3 (ex romantic action crime), Rating 1 Rating 2 Rating 3 (S V L), Vintage (sliding by 5 years) , Studio rating, Actors rating, Awards

    If only IMDB can put a button next to each movie Watch Now or Download that'll close all flixes that don;t want to subsribe to his model.

    A local Netflix App just appeared on my LG Blu Ray player.

    Thanks for the article! :) I just want to suggest for those who live outside USA and want to access Netflix, you can use UnoTelly. It changes your IP address so you can get US Netflix.

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