And is the USPS trying to hold Netflix's business model hostage?
"closing half our facilities, and slowing the transport of First Class mail from one day to two."
The Netflix DVD business lives or dies on USPS turnaround times. (Which is part of the reason why Netflix wanted to split that business off to the late, un-lamented "Qwikster" not too long ago.) Any good Netflix user can rattle off a list of DVD mailing logistics that would stun most onlookers.
(For example, I know that my local post office has "last call" at 4:15PM. If I drop off my disk by then, it will be at the Netflix sorting facility Wednesday afternoon, and they will mail a replacement disk Thursday morning which will arrive in Friday morning's mail.)
So you can imagine what a huge impact this USPS news is going to have on Netflix. It will essentially double the amount of time it takes a DVD to travel back and forth. According to the USPS they have no choice, because they are facing bankruptcy, and running $3 billion in the red. What else can they do?
In earlier days, the standard response has been to raise postage rates. Frankly, I'm not sure why they aren't doing that now. I also wish they would just raise the rates by a nickel at a time, and less often. I get tired of trying to remember if we're at 42 cents or 44 cents or what!
They also flirted with the idea of canceling Saturday delivery. But Netflix customers rely on Saturdays - as do postal customers who can't get to a post office during the work week to pick up their packages.
Frankly I am starting to wonder if they are holding Netflix hostage. Netflix is one of the last great USPS customers, and they are beholden to the whims of what seems to be an audience of people who hate inconvenience. (Talk about a first-world problem… but I count myself in that, too!)
The only number I could find was from 2002, when "Netflix mailed out 190,000 disks per day to its 670,000 monthly subscribers." With that kind of traffic, I wonder if the USPS is angling to charge Netflix a special tax, like a mobster's protection racket? Maybe create a new delivery level, "Netflix Select," that has the same turnaround times as the old First Class, but costs a little bit more.
All in all, I'm pretty sure that Netflix Streaming is the only winner here!