In the last financial year, the has USPS lost $8.5 billion, and there are some members of congress that believe the Postal Service will need a bailout or its continued operations may soon be in jeopardy. Disrupted or ceased USPS service would affect many industries and companies, including the Postal Service’s largest customer, Netflix.
Sen. Tom Carper from Delaware summed up his view on the USPS’s plight thusly:
“If corrective action is not taken quickly, the Postal Service will likely run out of cash and borrowing authority by this time next year, placing its ability to continue operations in serious jeopardy,”
Fortunately for Netflix, which pays the USPS more than $600 million per year in fees, several analysts believe that the content provider could survive a diminished or defunct Postal Service. From Wedbush Morgan’s Edward Woo:
“Most likely postage rates will increase and service will be cut on Saturday . . . While both are bad for Netflix (and other DVD by mail services), they aren’t critically bad and likely won’t change the tide of subscribers moving to Netflix.”
Merriman Curhan Ford analyst Eric Wold also believes that Netflix, which recently declared itself a streaming company, is diversified enough to press on should the worst befall the USPS. Said Wold:
“It’s getting tough to know if streaming is considered the incremental business or if that’s DVD, given that [Netflix said] more hours are being viewed through streaming than DVDs,”
What do you think, Insiders? Does Netflix have anything to worry about if the USPS cuts its service drastically? How many of you still use Netflix more for its DVD-by-mail service than its streaming option?
(via Home Media Magazine)