In what will certainly be a watershed moment for a company that made its name as a by-mail renter of movie discs, Netflix says that its streaming business margins will surpass that of its DVD business before the end of the current quarter.
Among the reasons for the decline in disc margins relative to streaming is the recent uptick in first-class postage, as well as a seasonal increase in by-mail rentals.
According to the company:
“We expect contribution margins for the domestic DVD segment to decline sequentially due to a seasonal increase in usage in the first quarter of 2013 and the expected USPS rate increase of $0.01 each way, which takes effect in January 2013,”
How many of you still favor by-mail rentals over streaming, Insiders?
[via Home Media Magazine]