Netflix has now issued an update to the app which eliminates the bug. If you're installing it on the new Google Nexus 7, you need to make sure that all Android 4.3 system updates have been installed first. The Netflix app for the new Nexus 7 offers users of that slate a special treat with streaming 1080p video. Later, Netflix will expand that capability to other Android devices. It should also be pointed out that this is not available on any iOS device at the moment.
The updated Netflix app for Android 4.3 is available now as a free download at the Google Play Store.
source: Netflix (Android) via AndroidCentral