My friend and former colleague Ed Albro of PCWorld thinks some of the angst over Netflix’s price hikes is a tad overwrought.

People aren’t happy about Netflix’s effective price hike. I wonder what the odds are that it’ll address their concerns–or at least do a better job of explaining its actions?

Netflix is announcing some pricing changes which are kind of confusing. The upshot seems to be this: if (like me) you want streaming access but not DVDs, you’ll continue to pay a reasonable $7.99 a month. If you want the ability to rent one DVD at a time and don’t care about streaming, you’ll now also be eligible for a $7.99 plan. But if you want streaming and DVDs–which, until recently, was the only option you had–you’ll pay more than you would have in the past.

For instance, if you want streaming plus one DVD, you’ll pay $7.99+$7.99, or $15.98–up from only $9.99. Streaming plus two DVDs is now $19.98, up from $16.99.

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Netflix is now letting U.S. users dial down the quality of streaming videos to avoid hitting bandwidth caps.

Users can choose from three quality settings by visiting the “Your Account” page on Netflix’s website and looking for the “Manage Video Quality” link. “Good quality” consumes up to 0.3 GB per hour, “Better quality” burns up to 0.7 GB per hour, and “Best quality” consumes up to 1 GB per hour for standard definition or 2.3 GB per hour for HD. The settings apparently apply to computers and televisions.

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Just how big is Netflix right now? Pretty darn big, if you believe the results of a study by “intelligent broadband” solutions provider Sandvine. During peak times, its streaming service accounts for a staggering 29.7 percent of all downstream Internet traffic, Sandvine says.

By itself, Netflix exceeds traffic for P2P file sharing, Web browsing, and real-time communications. By specific source, it far outpaces BitTorrent (at 11 percent) and YouTube (10 percent). Guess Comcast was throttling the wrong technology, eh?

Put that in perspective — that means one out of every four packets headed to an Internet user’s computer is delivering Netflix content, a pretty stunning ratio. It also is the biggest contributor to all real-time entertainment traffic, which is about half of all downstream data being delivered.

Could Netflix be ready to become the iTunes of streaming? I think so–and it may be all the more reason why Apple may want to throw its own hat into the ring.

With ISPs moving lately towards bandwidth caps, I wonder how much longer this growth in traffic from Netflix will be allowed to last. Executives were up in arms a few years back about how BitTorrent was clogging their pipes, but now it seems as if legal content is what’s now the biggest threat to bandwidth. Ain’t that ironic?

It’ll be a while before Netflix’s first original TV series, House of Cards, is ready to stream, but in the meantime, the company may find a new niche by saving TV shows from cancellation.

Following the news that NBC is cancelling The Event, Deadline reported that Netflix considered picking up the serial drama. It wouldn’t be unheard of; in an interview with All Things Digital last week, Netflix CEO Reed Hastings said he could see the company paying networks to keep shows alive, provided they were popular with Netflix streaming subscribers.

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As promised, Netflix is finally available on Android devices — but not all of them.

Right now, the Netflix app for Android only supports five phones running Android 2.2 or higher: HTC’s Incredible, Nexus One, Evo 4G and G2; and Samsung’s Nexus S. According to Android Police, Samsung’s Tab 10.1 is also covered, but Motorola’s Xoom is not. What’s important to note is that Netflix support is tied to specific devices, not to any particular version of Android.

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Ernesto over at TorrentFreak has an interesting premise: the meteoric rise of Netflix, and especially its streaming movie service, are having the surprising effect of tamping down on movie piracy here in the US. Impossible you say? Not so fast, it may actually make sense.

You could argue that movie piracy is much more popular for those movie watchers who don’t feel like paying an arm and a leg for a movie they’ve already seen, or is a couple years old. Just like an old car, these films lose their value. Thus piracy seems an attractive option since you don’t have to pay for it.

Enter Netflix. Its streaming movie service offers a lot of these films that these folks are looking for, and its price — only $7.99 a month — makes it quite attractive. Add to this the quality is likely much, much better in most cases than you’d ever get from a ripped movie, and more on-demand than downloading, and you’ve got a winner.

Ernesto says the site does have some evidence that the number of pirates out there in the US has decreased. With Netflix’s growth, one could easily argue that the site could be a contributor.

When Microsoft rolled out its major Hotmail upgrade last year, one big new feature was Active Views–the ability for Hotmail to do stuff such as as display Hulu videos and Flickr slideshows right in your inbox, as well as identify e-mails with shipping-service tracking numbers in them and show the package’s status. Today the company is announcing some additional Active View capabilities that let Web companies produce e-mails that behave a whole lot like Web pages. The idea, as before, is to let Hotmail users take action on e-mails without having to hop out of Hotmail at all.

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Netflix suffered a couple setbacks this week at the hands of Showtime and Starz. According to the Los Angeles Times, Showtime will no longer provide old seasons of “Dexter” and “Californication” for streaming, and Starz will delay streaming episodes of its new series “Camelot” by 90 days. Starz may also withhold movies from Netflix streaming in the future, the LA Times reports.

We’ve been hearing for a while that Hollywood is afraid of Netflix. For $8 per month, the service provides a huge library of on demand movies and TV shows, and has the potential to pull people away from existing revenue streams, such as DVD, video on demand and, in the case of Showtime and Starz, premium subscription television.

But as far as I know, that fear hasn’t produced any tangible effect on Netflix’s streaming service until now. With Showtime and Starz retracting content, we’re seeing the first signs of a Netflix streaming backlash.

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Wow. Netflix’s Watch Instantly service will the only place to see a new 26-episode version of House of Cards, based on the British show. It stars Kevin Spacey and is executive-produced by David Fincher, and generally sounds like something that you’d expect to show up on HBO or some other cable channel.

If this works–and even if it doesn’t–it could be one of the most important things that ever happened in the TV business. It could turn Netflix Watch Instantly from a place you go to watch somewhat stale old stuff into the only destination for a hot new program–and it could set off massive changes in how television content is distributed.

Isn’t the biggest single advantage that cable has over the Internet that it has the big shows first? What if that wasn’t a given? What if Netflix does more of these deals and starts to look more like an on-demand, all-you-can-eat HBO? Wouldn’t iTunes and Amazon and other well-heeled purveyors of Internet video be interested in doing similar exclusive deals? What if a sizable chunk of the most popular shows are Internet-only by, say, 2015?

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It behooves Nintendo to insist that the Nintendo 3DS is first and foremost about playing video games. That way, when a feature like Netflix streaming comes along, it’s a surprise instead of an expectation.

Netflix streaming was the big news from Nintendo’s Game Developers Conference keynote on Wednesday. The feature will arrive during the summer, at least a few months after the Nintendo 3DS’s March 27 launch.

Despite the news, Nintendo of America President Reggie Fils-Aime emphasized that the “primary function of the 3DS is to play games.”

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CBS said Tuesday that it had penned a two-year agreement to bring some of CBS’ most popular programming to the service. According to a press release issued by the network, the deal is non-exclusive. This likely means CBS is actively searching other methods of supplying its programming to viewers, a welcome sign considering many of the networks have been reticent to offer their content outside of their own walled gardens.

The content will begin appearing in April and include current content such as Medium and Flashpoint, as well as content from CBS’ classic library including Family Ties, Cheers, and Star Trek. CBS programming would be provided at no extra cost to Netflix users.

With the CBS deal Netflix becomes the only online entertainment service to offer content from all four major broadcast networks. Hulu comes close with Fox, NBC, and ABC on the service, but CBS still is holding out.

Amazon’s protracted battle against Netflix has begun. Starting today, Amazon Prime customers can stream a library of 5,000 movies and television shows at no extra charge.

Prime will continue to cost $79 per year, and still includes unlimited two-day shipping and $3.99 one-day shipping on retail orders. Even if you never buy a single item from Amazon, the Prime video service will save you $17 over Netflix streaming on a yearly basis.

That’s not to say Amazon and Netflix are comparable. Amazon streaming is missing from a few key set-top boxes, including video game consoles and TiVo (TiVo supports Amazon video on demand but not the streaming service, for now at least). As for the iPhone and iPad, Prime support seems unlikely, especially with Apple’s new policy towards subscription services. On the bright side, the service should work on Roku, Google TV and nearly 200 connected Blu-ray players and TVs. Engadget’s Tim Stevens even got some videos running through the Flash player on his first-generation Droid phone.

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Amazon could be pretty close to offering a subscription streaming video service similar to that of Netflix.

We’ve heard this story before, in a couple of rumors from last year, but over the weekend an Engadget reader reportedly spotted the streaming option while perusing Amazon’s on-demand video library. Amazon has also registered the web domain primeinstantvideos.com and several variants.

According to the tipster, Amazon may tie the streaming service to Amazon Prime, the retail program that provides unlimited two-day shipping for $79 per year. Subscribers would get access to roughly 5,000 videos in 480p resolution with no commercials, at no extra cost. This would undercut Netflix’s streaming plan by $17 per year.

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Thanks to Netflix, I’m starting to think social networks based on individual content providers are a lost cause.

Netflix announced this week that it’s abandoning a Facebook program that let subscribers rate movies and TV shows and share those ratings with friends. Never heard of it? You’re not alone; user disinterest is the reason Netflix is shutting it down, regrouping and coming up with a better strategy.

This is the second social networking effort that Netflix has scrapped over the last year. Last September, the company discontinued the “Friends” feature on its own website, which allowed users to view each others’ queues and recommend videos. Again, unpopularity was to blame.

Maybe Netflix is just really bad at social networking, but I’m more inclined to think that social networking and services like Netflix don’t mix.

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