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Why Netflix Now Loves the U.S. Post Office
By Swanni

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, right?

Wrong.

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 mail.

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
Janney 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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