Postal Service Surcharge Could Slash Netflix Profit

mikesd81 writes "Boston.com reports that Netflix Inc., the largest US mail-order movie-rental service, may suffer a cut in profits if the US Postal Service starts charging extra to manually sort the envelopes that carry its DVDs. An audit prepared by the Postal Service's Inspector General last month recommended charging one unidentified company 17 cents per envelope for labor costs. Citigroup analyst Tony Wible, who said in a note to investors Tuesday that the company is Netflix, estimated the charge might reduce profit per subscriber to $0.35 from $1.05. Wible advises investors to buy Blockbusters shares because their DVD envelopes don't have the problem (floppy edges that jam the USPS's automated sorting machinery). Netflix says the whole thing is no big deal and they will change their envelopes if necessary."

Comments

Re:42 million dollars

[botkiller]

Not when that 42 million dollars is eventually going to come out of Taxpayer money, y'know.

Has anyone mentioned that the blockbuster envelopes use a lot more paper than the Netflix ones? I get that they're "not as floppy", I'm glad that's a technical term now - but using a heavier paper equals more paper used, and I certainly doubt that Blockbuster gives a rat's ass about their mailer being environmentally friendly in any fashion. Probably not, since this article is mostly supposed to make me buy blockbuster stock, or make me switch to Blockbuster because my membership dues could go up with Netflix. I wouldn't do EITHER, because blockbuster's mail service SUCKS, have you ever been in a Blockbuster? Fifty copies of "Jingle all the way", and nothing worth a crap to watch. Now go online. Netflix's selection is a million times better, and they actually have films that I care to watch rather than nothing but the usual Hollywood schlock. Catch on earlier, USPS - and consider at the same time that Netflix is probably bringing more business to the USPS than they realize or want to admit, being that, when was the last time you wrote a snail mail letter to your friend in New York? Oh, never? Hmmm... but emails have nothing to do with that, right?

Also someone mentioned making the online distribution more available, both companies need to learn something when it comes to that - Netflix's online service only works with Windows machines, period, because it uses windows DRM. I don't even know if Blockbuster has one, but it would probably be the same. Any and all movie distribution services on the net need to learn that you can't just expect us all to own windows machines to download and watch movies LEGALLY on the net.