Netflix has quick fix for possible mail troubles
No Saturday mail delivery? There'd still be plenty of other days left to receive DVDs. Netflix can also use postage savings to acquire more streaming content.
The postman, an often overlooked low-tech part of Netflix's Web movie-rental business, may walk off the job--at least on Saturdays.
The U.S. Postal Service, founded in 1775, wants to drop Saturday mail delivery as part of a plan to cut costs, according to reports in The Washington Post and elsewhere. Some observers fear that Netflix customers could revolt if the weekend becomes a dead zone for disc delivery.
The proposal is a long way from being a sure thing. Several lawmakers and the union representing mail carriers will oppose a Saturday shutdown. And the people wringing their hands perhaps have forgotten aboutInternet streaming service. A Netflix spokesman declined to comment.
One research analyst who covers Netflix thinks that if the worst happens, Netflix users won't be put out too much. "I don't think most people would care," said Michael Pachter, from Wedbush Securities.
Pachter breaks down the problem this way: the average Netflix user rents 6 movies a month, or 1.5 movies a week. He says that if the mailman stops delivering those little red Netflix packages on Saturdays, people will learn to order movies early enough so they arrive before the weekend.
Plan B is Netflix's streaming movie service. In January, Netflix said that nearly half of its 12 million customers streamed at least 15 minutes of video over the Web in 2009, compared with just over a quarter of its customers the year before.
The streaming service, which is two years old now, is bound to get a boost if the iPad catches on. There are reports that Netflix has released an app for Apple's tablet computer that will allow owners stream movies to the device.
One possible benefit if delivery isn't available on Saturdays would be cost savings, money that Netflix could use to acquire more streaming content.
The merchant has said it expects to spend $600 million this year on postage and $700 million next year. However it shakes out, Pachter doesn't think that the popular Netflix service will get dinged for the postal service's problems.
"Yes, it will be slightly less convenient," Pachter said. "But who can blame Netflix. It isn't their fault."