I have an XBox One, and I'm attempting to play Netflix but I'm having troubles. My download speed is 50 MB/s download, 10 MB/s upload. No matter what the content is grainy, I can literally see little squares around some of the shapes. EXTREMELY LOW resolution at playback. Sometimes it does actually stream a nice clean HQ image but that is extremely rare. No matter what, it lags. I get the little loading circle every 3 minutes or so, grainy or not.
If I play Amazon Video, I don't have this problem. It comes in at HD quality, almost totally free of lag. It might lag once or twice out of a two hour movie, but it shouldn't considering my internet speed. Lastly, if I play a movie over X Box video, it comes in very clean, no lag.
Finally, I prefer VUDU movies. It takes forever to "authenticate." Literally, I let it run for a day, never finished loading. I'm thinking Microsoft is handicapping the competitors video rental app to force users to their own. Not cool, let customers make their own choice. If/when VUDU does load, the interface is terrible. I have a PS3, and will actually shut down my X Box One to watch videos over VUDU on the PS3. Its no point in promoting an "open" app universe when you're going to hobble the competition. X Box Video has a decent layout, and I would've tried it anyway, regardless of whether or not VUDU worked. But I just don't like it because I feel like I'm being forced to use it. I also don't like that its more expensive than VUDU.
Just so you know, I only have a single laptop and cell phone. Neither is pulling down that much bandwith at any given moment to cause video playback to lag... and even if it were, my internet performance prioritizes media streaming, so it would give higher priority to Netflix than a Facebook status update coming into my phone.
If I might add here, because its all video related issues... the OneGuide is terrible. For some reason it defaults to the HD channels, which I'm not subscribed to, and it doesn't pull in all the channels--anything less than channel 100.