Netflix Hope Proposed Postal Changes Will Boost Digital Service


While the U.S. Postal Service is planning to reduce its six day delivery schedule to just five delivery days, in effect removing Saturday mail delivery, Netflix does not appear to be the least bit concerned. In fact, the removal of Saturday delivery could actually help them in the long run. Why? Because with consumers not having access to their DVD’s on Saturday via the mail, they may opt to sign up for the digital streaming service–or so analysts believe, and Netflix is hoping.

Netflix-postalThere would, however, be some customers who would be greatly affected by this. Rural customers would be the first ones to feel the pinch, especially those who do not have access to high-speed broadband internet connections. The removal of Saturday mail service could actually play well into the hands of Redbox, the Coinstar owned DVD-vending-machine company that has thousands of locations across the United States, including rural areas.

Another concern is for those customers who find themselves trying to get the most bang for their buck and get as many DVD’s as they can per month. For these consumers the removal of Saturday delivery would definitely hurt the value they see in the Netflix service, however many analysts agree that these type of customers are few and far between.

Netflix began this year (2013) with just 8.2 million DVD by mail subscribers and when compared to the whopping 27.1 digital subscribers Netflix is probably won’t be feeling much pressure if the Postal Service decides to cut Saturday delivery. Investors also didn’t seem to mind, as Netflix’s stock gain nearly 6 percent after Wednesday’s announcement.

3 Comments

  1. sevensigns715
    sevensigns715 February 12, 2013 at 4:26 pm

    They’re hoping this will increase digital interest, but Netflix doesn’t have the capacity to be a streaming-only service, and will have to rely on the profits they make off this new plan to sustain them in the interim.  I switched from Netflix to DISH after last year’s price changes, and couldn’t be happier.  It’s true my monthly fee for DISH is higher than a Netflix customer’s, but at least I know I’ll get what I pay for.  This seems a bit sneaky by Netflix to just change their business model without changing the price, and customers will eventually catch on.  With my Blockbuster @Home package from DISH I have access to over 100,000 games, movies, and TV shows, and can stream live, order by mail, or exchange titles at a BB store.  It’s really convenient to be able to just flip on the TV and browse thousands of streaming titles when I get home from work at DISH.  We get movies-by-mail from time to time, but if the Post Office DOES implement the Saturday ban, we’ll just stream those days.

  2. SteveSanger
    SteveSanger February 12, 2013 at 4:34 pm

    @sevensigns715  @Home Just like the music industry, the movie and TV industry will go digital. The reason Netflix are pushing digital streaming is because they know that the days of physical discs are running out. Until Dish and all the other cable/satellite companies can offer a massive choice on-demand for no extra fee, then i think Netflix have a good business model.

  3. ona
    ona February 13, 2013 at 11:49 am

    DVD by mail is a dieing business, expensive and uh unneccesary. Why waste all those resources moving discs around when its all available digitally?

Leave a Reply