While Netflix Watch Instantly movie streams are mostly useful for casual viewing, if you're interested in the actual quality of the video provided you may have noticed a few changes recently. Chronicled in a thread on AVS Forum and reported to us by several tipsters, more than a few users have noticed their streams on 1080p-capable hardware (PlayStation 3, WDTV Live) no longer rock the "X-High" notification (on PS3, hit select to view more information bout your streaming details) that had previously let them know they were getting the highest quality possible. We checked with Netflix, and according to the company, it's rolling out better encoding that improves picture quality despite using a lower bitrate. That means 1080p works even for people with slower connections, and increases detail on "textures, shadows, skies, and particularly faces." As a result, what was previously called "X-High HD" is now being labeled a tier lower.
[Source: Engadget]