Netflix Throttling

[Kevy Baby]

Further boring you with how the USPS works and the costs that Netflix deals with:

Alex is correct that due to Postal regulations, they cannot be sending these via Standard (bulk) rates. Also, the delivey timing of Standard Mail (much slower than First Class, even with BMC drop shipments) would REALLY have Netflix customers up in arms!.

Netflix is getting some level of automation Postage discounts. However, they are still paying somewhere in the neighborhood of 30-31 cents per single disk mailed (I'm pretty sure that a single disk would remain under 1 oz.). Don't forget that the postage cost of the return (using Business Reply Mail - the service where the returnee does not have to put a stamp on the return piece) is 36.6¢ each*.

The round trip postage is approximately 67¢ for each disk. If someone is renting 20 disks per month, that is $13.40 per month in Postage costs alone. That doesn't leave a whole lot of room for Netflix to make any money.

As far as timing, the USPS will tell you they have 7-10 days to deliver First Class mail. However, the national average for First Class delivery into homes with Automation is 3-5 days (assuming Coast-to-Coast - if I remember correctly, Netflix mails out of Northern California). If you live in a larger metropolitan area, you typically will see quicker delivery than if you live in some podunk area such as East Washington. Yes, you will see the exceptions (I would predict that the 7-day delivery that Drince references was probably a hand-addressed, non-aotomated letter), but they are fairly consistent in their timing; weather delays aside.


* I am assuming High Volume QBRM rates.