Agreed completely with this - there are second order effects to this as well on the customer side. A smaller file for the same quality means that customers nee

Agreed completely with this - there are second order effects to this as well on the customer side. A smaller file for the same quality means that customers need less bandwidth to stream a show, improving their experience and decreasing buffer times, etc. This might not be as relevant in the USA as other places, but I'm sure there are a significant number of customers and potential customers that this will make a difference with. With an encode-once stream-many setup, it's likely quite worth it for Netflix to pay whatever upfront transcoding cost if the resulting file is advantageous in any way.