Postal Service Looking to End Next-day Mail Delivery - 3 day delivery for Netflix DVD - High-Def Digest Forums
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Old 12-05-2011, 10:05 PM
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Default Postal Service Looking to End Next-day Mail Delivery - 3 day delivery for Netflix DVD

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Postal Service Looking to End Next-day Mail Delivery

5 Dec, 2011
By: Erik Gruenwedel




Implementing up to a 72-hour delivery window would delay Netflix, Blockbuster by-mail disc rentals

The financially challenged U.S. Postal Service Dec. 5 said it is taking further steps to eliminate first-class, next-day delivery of letters, postcards and related items — such as Blu-ray Disc and DVD mailers — in an effort to save money.


Netflix is the Postal Service’s largest individual commercial mail client, generating more than $500 million annually in first-class postage revenue.


The USPS in September first announced intentions to possibly eliminate more than 250 mail processing centers, stop Saturday delivery and eliminate about 28,000 jobs, among other steps.

The USPS, which lost $5.1 billion in its most recent fiscal year, is looking to enact $20 billion in cost savings and return to profitability by 2015.

“The proposed changes to service standards will allow for significant consolidation of the postal network in terms of facilities, processing equipment, vehicles and employee workforce and will generate projected net annual savings of approximately $2.1 billion,” David Williams, VP of network operations, said in a statement. “This is part of the overall savings expected from the network optimization initiative, which is projected to save up to $3 billion by 2015.”

The changes, which must be approved by the Postal Regulatory Commission, would not go into effect until next April.

“Our network is simply too big to handle the revenues that are coming in today but, more importantly, way too big for what we're projecting in the future,” Williams said in a press conference.

A representative from Netflix, which increasingly has placed focus on its streaming service over its by-mail service, was not immediately available for comment.

On HackingNetflix.com, comments typically were negative, with vows that additional delays to disc shipments would result in more terminations of service if first-class rental disc delivery were compromised.


“If Netflix wants to survive they better look into providing new releases on a pay-per-view basis via streaming,” posted George S. “Adding another day or two to get movies in the mail would probably make me drop the service because the value would no longer be attractive. I may as well stream the new movies from Amazon or via satellite and pay for them individually.”

“I would hope that Netflix would either lower their rates, or bump the number of discs allowed at a time to compensate for this,” wrote Jonathan. “I don't mind paying the current rate for 8 or 9 movies a month, but if it drops to 4 or 5, Redbox is a much better option.”


http://www.homemediamagazine.com/net...delivery-25802
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Old 12-05-2011, 10:09 PM
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Proposal would be implemented by next April.

Obviously a 3 day delivery time allowance for DVD and Blu-ray mailed out would in effect reduce the number of DVDs a consumer could receive from Netflix under any current out plan. Especially if the current policy of shipping out a new disc in the que upon receipt would remain.

Obviously if implemented it would make DVD rentals from Netflix less attractive for consumers and that's still where Netflix generates most of its revenues to support its streaming service and content acquisition costs.
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Old 12-05-2011, 10:10 PM
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I think this sums it up:

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“If Netflix wants to survive they better look into providing new releases on a pay-per-view basis via streaming,”
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Old 12-05-2011, 10:14 PM
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This will for sure cause another wave of cancellations. Not good news for Netflix.
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Old 12-05-2011, 10:27 PM
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Originally Posted by silverado View Post
I think this sums it up:
Pay per view is something that they say they will never do as they are wedded to a flat fee subscription model.

They never can afford new release movies on that basis for the current low flat fee and the studios do not want to give them access to current movies as it undercuts their other revenue streams.

Tough position for Netflix.

They know they want to move away from DVD by mail for reasons just like this and future uncertainty with postal operations. That obviously was a reason for the fast push to streaming as who would want their business dependent on the performance and survival of the post office long term?

But by doing this as soon as three months from now by April 2012, right after the calamitous summer and the Quikster. price raises and separating out DVD and streaming debacles any threat to the cash cow that DVD by mail rental revenues have been makes it even more difficult to happen now.

Its just one bit of bad news after another this summer and fall for Netflix.
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Old 12-06-2011, 01:31 AM
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Just saw a report on Fox News that the post office proposal also includes elimination of Saturday mail delivery which of course also slows the back and forth of discs from Netflix and Blockbuster and Gamefly etc.
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Old 12-06-2011, 02:31 AM
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Only the beginning. Post Office is going for broke (like the rest of the Feds)...not to worry, QE3 is coming. *rolleyes*
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Old 12-06-2011, 10:49 AM
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If this were implemented, and I still had a Blockbuster account, it'd take 8 days for me to get 1 rental. I'm back to a streaming only plan, so this won't affect me.

I gotta think eventually someone will buy Netflix. Can they operate like this long-term?
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Old 12-06-2011, 11:07 AM
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Originally Posted by Mr. Cinema View Post
If this were implemented, and I still had a Blockbuster account, it'd take 8 days for me to get 1 rental. I'm back to a streaming only plan, so this won't affect me.

I gotta think eventually someone will buy Netflix. Can they operate like this long-term?
Well, they can blame the post office, and in the meantime, actually save money. As it will be fewer shipments which would be a cost save.

I would also think that their hope is people will switch to a streaming only plan, but that is also a double edged sword as it would fuel the content owners even more to demand more money from Netflix.
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Old 12-06-2011, 11:47 AM
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Quote:
Originally Posted by Mr. Cinema View Post
If this were implemented, and I still had a Blockbuster account, it'd take 8 days for me to get 1 rental. I'm back to a streaming only plan, so this won't affect me.

I gotta think eventually someone will buy Netflix. Can they operate like this long-term?
I really doubt that Netflix will be bought. Too much negativity that comes with the name ( just read the articles reported in this forum alone) and the contracts with studios that are about to be renewed will be sky high from what they are now.
Makes more sense to start from scratch, like Amazon, and build from a more positive base.
Netflix will continue to flounder and will drop physical rentals to "cut costs and pass savings to the consumer" after USPS increases price and decreases delivery speed.
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