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Postal changes will slow Netflix delivery

Will you be tempted to dump your Netflix DVD-by-mail service when the post office adds another day to first-class delivery?

By Karen Datko Dec 5, 2011 6:45PM

I kept my Netflix DVD-by-mail service after that hugely unpopular price increase. For better or worse, most of the movies in my Netflix queue are not available for streaming. 

 

Now that the U.S. Postal Service has announced $3 billion in cutbacks for 2012 that will add another day (or two) to first-class mail delivery, I've got to wonder: Will DVD-by-mail be worth its $7.99 monthly cost?

 

Some Netflix customers don't think so.  Post continues below.

At Hacking Netflix, reader "Hamilton Whitney" offered these thoughts:

Currently we have the one disc plan. If we watch the movies immediately and send them back the next day we end up with two discs a week so around 8 a month, which is a good deal. If there's an extra day added to when Netflix gets our disc back and then another added to when we get the one shipped, that's going to end up at just one movie a week. At that point it's going to be cheaper and more convenient to go Redbox.

Another one-disc-at-a-time user had a similar reaction:

I would hope that Netflix would either lower their rates, or bump the number of discs allowed at a time to compensate for this. 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.

Of course, it all depends on how often you watch Netflix movies on DVD and which plan you're on. For instance, if you're watching only one movie a week right now, an extra day either way won't make a difference.

 

Meanwhile, some customers observed that Netflix will be paying less overall for postage. "Maybe they would pass on the savings to its users," "ScottZ" wrote. (Good luck with that.)

 

How much of a delay are we talking about once the Postal Service closes 252 mail-processing centers, starting in March? According to The Associated Press:

About 42 percent of first-class mail is now delivered the following day. An additional 27 percent arrives in two days, about 31 percent in three days and less than 1 percent in four days to five days. Following the change next spring, about 51 percent of all first-class mail is expected to arrive in two days, with most of the remainder delivered in three days.

What's Netflix's response to this development? Says Mashable: "When asked whether the company plans to address customer concerns or to amp up licensing for its streaming service, Netflix declined to comment."

 

Coincidentally, Netflix and the U.S. Postal Service are both on a list of five brands consumers polled by Prophet expect will disappear by 2015, according to Forbes. In other news, Netflix CEO Reed Hastings was picked the worst tech CEO of 2011 by readers of The Street.

Of the more than 200 people that voted, 58% named Hastings as the most terrible tech titan of the year after a series of blunders that included mishandling a subscription price hike and confusing consumers with plans to split up the company's DVD-by-mail and subscription businesses.

What's your plan for Netflix if you're still a customer? Will the mailed-DVD option lose sufficient value to cause you to drop it? Will you respond by increasing the number of mailed DVDs? Or did you already leave long ago?

 

More on MSN Money:

12Comments
Dec 6, 2011 12:21AM
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@pocketprotector, what they are saying is that if they can only send a customer four movies a month instead of eight due to the speed of the Postal Service, then their postage costs for that customer are cut in half.  Each disc does still cost the same to ship.  They will just be shipping less.
Dec 6, 2011 12:27AM
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We left Netflix months ago after the increase in our plan. Dropped them altogether and we manage just fine.
Dec 6, 2011 7:28AM
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I have been a long time customer of Netflix's DVD mail service and I was very happy when my side of their service price went down. I average 4 to 6 DVDs a month throughout the year and I have never rented a movie from Redbox. I don't like having to drive somewhere to return a movie; it's convenient to pick one or two up at the store because you're already shopping, but then you have to return it.       If Redbox came up with a way to mail their movies back, I would probably drop Netflix and go with Redbox.
Dec 6, 2011 4:07PM
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I dropped Netflix a few months ago too and I honestly don't miss the outdated streaming or the nearly equally outdated dvds by mail.
Dec 6, 2011 6:00PM
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Netflix is the ONLY place right now I can get the old, old movies I love! So I will stick by it and hope it doesn't ever leave me!
Dec 6, 2011 2:18PM
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HEY, NETFLIX, "WAKE UP",      

 

           JUST SEND TWO DISC AT A TIME!

 

                                    FROM  DUH and DUHER

 

PS   This will bring the couch potato ("e")? back to you.

PS2 What a way to run a one car funeral.

PS3 pet dog is a car, 85bmw535i,310,000mi.​one owner, work on it yourself or go broke, bi, bi.

'

Dec 6, 2011 6:15PM
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If the post office 'already slow' delivery times reduce the number of netflix disks that I can see in a month, I'll cancel my membership. There is no point paying for a service that I won't recieive. Red box is easier, faster and similarly priced. WIth reduced number of of DVDs from Netflix Red Box, which also increased its fees, will be a substantially better deal. Netflix never has new releases available on a timely basis. Put a new release in your que and what you get is the message - Long Wait or Very Long Wait. Most can't be had for a month or two. Red box has them the same day. In some cases Netflix does not have a new DVD release availabe at all.

 

Driving to a Red Box is not an issue, as some may claim. They are at the grocery store, gas station, McDonald's, WalMart, and drug store that I shop at anyway. In a major city like Houston it is hard not to trip over a Red Box Kiosk where ever you happen to be.  

Dec 12, 2011 1:02AM
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@ Fred R. Herman - Netflix isn't streaming straight from DVD because it is illegal. These movie companies are not going to give them that right. They already are forcing Netflix to release the DVD's later. Hence some of the newer movies are released a month after the official release dates. It looks like Netflix will eventually be put out of business or forced to stream only. If I had to guess these companies will force it out of business in order to stream their own movies. For example, Universal Studios, NBC and Comcast are the same company. Comcast streaming NBC/Telemundo televsion as well as Universal movies makes them a profit. Netflix streaming their content doesn't make Universal much. They are each others competition now that Netflix has grown so large. Hence the older movies mainly being streamed right now as well as longer release dates of newer movies. 

Second point I wanted to make is that Netflix and the postal service have a deal for discounted rates on first class mail. *If* movies are delayed a day or two, they would be saving quite a bit of money. I read somewhere that Netflix presorts the movies but about 70% of the return movies get caught in the machines and have to be sorted by hand. The post office usually charges for the hand sorting but hasn't done so with Netflix. Netflix's response is that they pick up the sorted mail at the post office which saves the post office money. Clearly a love hate relationship going on with the two. 
Dec 6, 2011 3:35PM
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I don't really use the delivery part so it won't effect me.  However, I don't see this part as bad.  So you wait an extra day for dvd delivery.  Its not like Netflix will be the only one suffering.  Any other like business will take the same hit Netflix will.
Dec 6, 2011 4:49PM
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We cancelled the dual Streaming and Mail Delivery only keeping the Mail portion.

 

Many of are saying that If NetFlix goes to where you only have one disk a week it will be better to use Redbox.  Dont Forget People....those are only one day rentals and you have to drive somwhere to pick up and again drive the next day to drop off.  This can add up in Time and Gas as well so consider ahead all of your options.   We are extremely ticked off at NetFlix as well but its still better getting them in the mail even if we have to wait an extra day.  Plus we dont have to rush to see the movies same day we get them.

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I am a Netflix customer. At first I just dropped the streaming option because my internet connection didn't support streaming very well. Once I maxed my ram from 1MB to 3MB and downloaded cineplayer software ($15 one time fee) for Vista Home Premium the Netflix streaming worked just fine. So I dropped the DVD service and just went with streaming only. Why not offer the DVDs for a streaming fee and skip the US mail altogether? I'm talking about those DVDs that are currently not available to stream but that you can get by mail. I would suggest Netflix offer the mail service on a per DVD basis and be done with it. That way it wouldn't make any difference if you rented 5 or just 1 DVD. This would be just like when I went to Family Video, a bricks and motor video store, before I moved.  The price currently comes out to about $1 plus tax per DVD given that you're paying $7.99 plus tax for 8 DVDs in a month. Family Video had DVDs for $1 and some for just $.50 and then new releases for about $2. So the price was broken down by how current the movie was. I'd like to see Netflix offer this virtual video store option via streaming and you'd be able to restream for say 24 hours. They could aggregate all your charges and then just bill your credit card at the end of the month. Or you could keep a $25 balance and then you'd just replenish the balance back up to $25 at the end of the month. I don't see Netflix going away. They will adapt and continue.
Dec 5, 2011 11:07PM
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One guy said netflix will be "paying less in postage".  Why?  Postage rates are not decreasing, they are simply closing more stores and therefore sorting and delivery will take longer.  Netflix will be paying the same rates for postage.
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