US entertainment giant Netflix will reduce the data its streaming service in Australia consumes in a bid to reduce broadband congestion as mobile and internet providers struggle to cope with rising demand from people stuck at home.

Netflix was due to compress the bit rates of its streams from Tuesday evening to help telecommunications providers cope with high levels of demand, following a similar move in Europe. Netflix Australia is the first local provider to reduce bit rates.

Netflix is experiencing a sharp uptick in usage as people stay home. Credit:Bloomberg

Ken Florance, Netflix's vice president of content delivery, said the reduced rates will be enforced in Australia for the next 30 days.

"Given the crisis, we've developed a way to reduce Netflix's traffic on the telecommunications network by 25 per cent while also maintaining the quality of our service," Mr Florance said.