How Netflix works in virtual reality, and why it’s not HD
It's true, the Netflix VR app is ready for your compatible* Samsung phone and Gear VR headset (if you don't see it, try uninstalling and reinstalling the Oculus app), and has a virtual living room for you to chill in. Oculus CTO John Carmack worked with Netflix on the app, and in a post to the tech blog explained how it all comes together. Besides the technical details of how the app creates a screen inside a virtual environment, and includes controls for use while browsing or viewing, Carmack also explained one more thing: the streaming video in VR is limited to standard definition (720x480). According to Carmack, because the area you're actually looking at is only composed of so many pixels, 720p is the highest res video you should consider for VR right now. The reason he can't hit that mark? Content protection, aka DRM.
So after all the pixel counting is done, the real question is -- how did it look? I gave it a shot on a Galaxy Note 4 plugged into the original Gear VR headset, and it was surprisingly good. The video stream was clear, and the virtual world actually did help settle me in. The resolution wasn't nearly as much of an issue as you would expect. While it's not the sharpest or highest quality looking stream, I saw very little artifacting, and decent color reproduction.
See the full story here: http://www.engadget.com/2015/09/25/how-netflix-works-in-virtual-reality-and-why-its-not-in-hd/