Netflix in trouble?

[SmoochyTX]

Netflix has become extremely popular since its inception, using the existing mail system to create a relatively efficient and easy to use movie rental empire. While their subscribers might enjoy the relative ease of picking up movies in a mailbox and returning them the same way, the US Postal Service is less than pleased.

You can read the rest of the article here.

ETA - A separate but related article from Reuters about the matter - Click me

 

[waggy]

its not going to drive them out of business. its just going to raise the price.

 

[mugs]

The recommendation: make the return envelopes machinable, or be subject to a standard 17-cent per piece non-machinable charge.

In a research note this morning, Citigroup?s Tony Wible asserts that if the company has to absorb a charge of that size, it will cut monthly operating income per subscriber by 67% to 35 cents from $1.05.

Wait - an extra $.17 per envelope, and it's mailed both ways, and that would only cost them an additional $.70 per subscriber? Their subscribers average 2 DVDs per month? What am I doing wrong here?

I did notice that GameFly uses a different sized envelope, I wonder if it was designed to fix this issue?

 

[DaveSimmons]

Looks like they won't be for long:

The issue stems from the shape and design of the envelopes, which prevents them from being machine-handled. Obviously with the enormous amount of mail that is processed, having machines doing a lot of work is necessary. ...

It seems Netflix will comply with the USPS, and has decided to go for a redesign.

Whew! I :heart: DVDs and blu-ray discs arriving in my mailbox every week

 

[waggy]

Originally posted by: mugs

The recommendation: make the return envelopes machinable, or be subject to a standard 17-cent per piece non-machinable charge.

In a research note this morning, Citigroup?s Tony Wible asserts that if the company has to absorb a charge of that size, it will cut monthly operating income per subscriber by 67% to 35 cents from $1.05.

Wait - an extra $.17 per envelope, and it's mailed both ways, and that would only cost them an additional $.70 per subscriber? Their subscribers average 2 DVDs per month? What am I doing wrong here?

I did notice that GameFly uses a different sized envelope, I wonder if it was designed to fix this issue?

you have gamefly? how is it? thinking of getting something like that.

 

[Ns1]

dude, it would cost them far less to just change the envelope = problem solved

 

[SuperjetMatt]

Originally posted by: waggy

Originally posted by: mugs

The recommendation: make the return envelopes machinable, or be subject to a standard 17-cent per piece non-machinable charge.

In a research note this morning, Citigroup?s Tony Wible asserts that if the company has to absorb a charge of that size, it will cut monthly operating income per subscriber by 67% to 35 cents from $1.05.

Wait - an extra $.17 per envelope, and it's mailed both ways, and that would only cost them an additional $.70 per subscriber? Their subscribers average 2 DVDs per month? What am I doing wrong here?

I did notice that GameFly uses a different sized envelope, I wonder if it was designed to fix this issue?

you have gamefly? how is it? thinking of getting something like that.

I like it, but shipping times are awful. 2-3 days each way (I am in WA) and 1-2 days processing.

 

[Viper GTS]

This shouldn't be a huge issue to fix, the USPS size & aspect ratio requirements aren't that bad.

I am surprised, however, that the USPS took this long to make them do it. It should have been handled back when Netflix first negotiated their bulk rate/contract with them. Unless of course new sort machinery has made the change necessary.

I spent 6 months essentially living in a post office, I can attest to the fact that Netflix was sorted by hand while Blockbuster apparently was not (saw lots of bins of Netflix, none of Blockbuster).

Viper GTS

 

[mugs]

Originally posted by: waggy

Originally posted by: mugs

The recommendation: make the return envelopes machinable, or be subject to a standard 17-cent per piece non-machinable charge.

In a research note this morning, Citigroup?s Tony Wible asserts that if the company has to absorb a charge of that size, it will cut monthly operating income per subscriber by 67% to 35 cents from $1.05.

Wait - an extra $.17 per envelope, and it's mailed both ways, and that would only cost them an additional $.70 per subscriber? Their subscribers average 2 DVDs per month? What am I doing wrong here?

I did notice that GameFly uses a different sized envelope, I wonder if it was designed to fix this issue?

you have gamefly? how is it? thinking of getting something like that.

I initially put 12 games in my queue. I was pretty pleased to see that they shipped out my first two choices first, even though they had both just come out - Mass Effect and Assassin's Creed. After returning those two, they sent me two games from the middle of my queue. Like number 5+. Now I find myself torn. I put Lair in my queue as a game that I'd like to play some day, but I was in no hurry to play it. I'd really rather check out Uncharted or Rayman 2 or BWii. But even if I return Lair quickly, I have no confidence that I'll get a game that's high in my queue. So if you really want to play the latest and greatest games right when they come out, I'm not sure it's a good way to go. On the other hand, I signed up for GameFly because my local rental places were all rented out of the latest and greatest games, so it's a toss-up.

I figure at $22 a month, I need to buy one fewer game per 3 months and it'll pay for itself. Right off the bat it allowed me to finish Assassin's Creed without buying it, so that paid for 3 months. Assassin's Creed isn't a game I would play much in the future, so I'll probably wait until it's < $15 and pick it up again to play through again and get some more achievements.

I think it'll save me from buying some games that I might regret buying, so I think it'll be worth it.

 

[FoBoT]

it only makes sense to use a machine handleable envelope
i guess they are slow

 

[Queasy]

According to this, Blockbuster's envelopes aren't a problem.

I'm sure Neflix will just redesign the envelope. I think they've been through at least two or three envelope redesigns since they started.

 

[Cabages]

I had no idea they did HD-DVD...

Looks like im getting an HD-DVD player.

 

[RossMAN]

Speaking of HD DVD, what's their selection like?

/me lazy

 

[waggy]

Originally posted by: RossMAN
Speaking of HD DVD, what's their selection like?

/me lazy

the HD-dvd selection is pretty good. not as great as the blu-ray but still darn good.

 

[Queasy]

Originally posted by: RossMAN
Speaking of HD DVD, what's their selection like?

/me lazy

Amazon listing

 

[MikeyIs4Dcats]

Netflix also pre-sorts much of their mail, and picks it up from the PO in bulk. To me, that saves the USPS quite a bit, so I think that it's a tradeoff. I bet Netflix quits presorting and picking up though after they are forced to change the envelope.

60 Minutes did a pretty interesting piece on Netflix one night.

 

[Chryso]

The post office should be thanking them for helping to keep the trucks full.
They are going to my house every day already.