Netflix Now Loves the U.S. Post Office
Washington, D.C. (February 7, 2013) -
Despite its growing streaming business, Netflix still has to
deliver DVDs and Blu-ray high-def discs via the mail to more
than eight million subscribers who prefer that option.
So you would think that Netflix would absolutely hate the U.S.
Post Office's decision to eliminate Saturday mail delivery,
The online home video service couldn't be happier with the Post
Office because eliminating Saturday mailings means fewer discs
will be mailed out, reducing Netflix's overall postage costs.
Plus, it's likely that the new policy will reduce the number of
discs a subscriber can watch each month, which could prompt more
disc-only subscribers to switch to streaming. Netflix has said
it wants to convert disc customers to streaming because it's
less expensive to transmit a video over the Net than via the
Investors, of course, were way ahead on this one, sending
Netflix's stock up six percent yesterday after news of the U.S.
Post Office decision was revealed.
The Associated Press reports that
Montgomery Scott analyst Tony Wible says Netflix will spend $300
million on postal expenses this year, but could cut that back to
$200 million by next year.
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