One of the great dilemmas with online video is the bitrate at which you compress. The more you compress, the better then deliverability (faster starts + fewer skips, stutters, pauses, etc). But, of course, you suffer quality loss. If you compress less, at a certain point, almost no one can view your videos because the bandwidth requirements are too high.
Every video service ends up deciding what's more important to them. To us, our decision point has been that we should deliver higher quality 1080p video than anywhere else on the Internet, and I believe we deliver that today. Our quality at that resolution exceeds YouTube, Vimeo, and Netflix. As a result, though, fewer people can stream it at 1080p. There are two parts to our bet: 1) Bandwidth continues to increase, so in the future more people will be able to view it at this quality, and 2) our brand promise is that your photos & videos look better here than anywhere else.
But we can't just leave it at that, because people do want to watch these videos. So what we do is compromise on the compression at lower resolutions so they stream quickly and with few errors. At 720p and lower, we're comparable to the other services in terms of quality, bitrate, and deliverability. In the end, it means we can deliver a very good experience to people with ample bandwidth, and a fairly good experience to people without.
If you have some examples, I'd be happy to take a look and make sure we're meeting our goals on both those fronts.