Here is a thread on Twitter that explains (in german) what they're doing and why:
link
Translation:
Just had a video conference with @dtemkin of #Netflix regarding #NetflixQualityDrop:
- highest bitrate is removed, in HD profile instead of 3.8 still 2.9Mbps. Analog in UHD profile. SD profile unchanged.
- saves about 25% bandwidth
- The #NetflixQualityDrop measure is initially limited to 30 days. Europe as of now, the rest of the world will probably follow next week.
- There is no opt-out for providers
- The measure is quite an exercise for #Netflix and was implemented very quickly. The hope remains that it will remain an absolutely unique thing.
- The reason for #NetflixQualityDrop is not to overload #Peering or cache servers.
- The main driver for #NetflixQualityDrop is the overload of backhaul capacity of some broadband providers (namely in Italy, Spain). These are running at full capacity and additional cache servers in the cities cannot be implemented by #Netflix in a timely manner.
- Last but not least there was only an "all" or "nothing" for #Netflix and in the sense of crisis management in some areas the decision of #NetflixQualityDrop can be understood, even if it sometimes hits the wrong customers.
- It is clear to everyone that #Netflix would have preferred to do without it as well.