12/12/2007
USPS Hates Netflix Envelopes
According to an article in the NY Times, the USPS isn't happy with Netflix because their red envelopes must be sorted by hand. The US Postal Service estimates that the manual sorting of 1.6 million Netflix envelopes per day is costing them about $21 million a year.
As a result, the USPS wants to add a 17 cent surcharge to every package that requires hand sorting - including Netflix DVD envelopes. Tony Wible, a Citigroup analyst who wrote the report, says that the income that Netflix receives per subscriber would fall from $1.05 to 35 cents and that Blockbuster’s return mailing envelopes do not cause this problem. This could make a big competitive difference for the 2 companies.
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As a result, the USPS wants to add a 17 cent surcharge to every package that requires hand sorting - including Netflix DVD envelopes. Tony Wible, a Citigroup analyst who wrote the report, says that the income that Netflix receives per subscriber would fall from $1.05 to 35 cents and that Blockbuster’s return mailing envelopes do not cause this problem. This could make a big competitive difference for the 2 companies.
"We know that Netxflix, which mails out about 1.6 million movies a day, is clever enough to create a redesigned mailer sometime soon." ~ GearLive.com
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I think that the amount of inventory (total stock of DVDs) sent out to customers daily is: (1 million DVDs shipped per day) divided by (total stock of 40 million DVDs). According to this calculation, 2.5 percent of the total Netflix inventory of DVDs is shipped out per day.
The 35,000 titles in distribution divided by the 45,000 total titles available indicates a broad range of demand (customers aren't just watching the top 100 blockbusters), in terms of customer taste. It doesn't really indicate how empty the warehouses are (see the previous paragraph for an indicator of that).
Of course, I suppose much depends on how one defines "inventory" in this context.
The 35,000 titles in distribution divided by the 45,000 total titles available indicates a broad range of demand (customers aren't just watching the top 100 blockbusters), in terms of customer taste. It doesn't really indicate how empty the warehouses are (see the previous paragraph for an indicator of that).
Of course, I suppose much depends on how one defines "inventory" in this context.
[*] posted by 
: December 14, 2007 10:46 AM
: December 14, 2007 10:46 AMLinks to this post:
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