No Saturday Mail Delivery Shouldn't Hurt Netflix, Gamefly In Long Run

A collective shudder likely went up the spines of Netflix and Gamefly customers around the nation when they heard the U.S. Postal Service is looking to eliminate Saturday delivery.

Both services — Netflix for DVDs of movies and television shows, Gamefly for video games — rely on snail mail to get their goods into customers' hands. Other mail order businesses, such as Amazon or eBay don't rely solely on the post office for delivery and in most cases shipping costs fall to the customer, so if someone wants more expensive overnight delivery, they can pay for it.

But with Netflix and Gamefly, the customers can borrow, to a degree, as many DVDs or games as they want in a month for the same fee. If Charlie Jones received 2012 in Wednesday's delivery, watched it right away and dropped in the mail that same day, it would be technically possible to receive another DVD to replace it in just a couple of days. So neither company is likely to be willing to pay FedEx or UPS more to deliver videos or games on weekends; the customer's gonna just have to wait until Monday.

One website went so far as to suggest that maybe Netflix should just buy the postal service and enact sweeping changes, saving money and keeping their Saturday service.

But more and more customers are streaming video from Netflix, cutting out the DVDs entirely. Besides through computers, Netflix subscribers can purchase special receivers or use their video game consoles to stream the video directly to their television sets. There's no reason why this couldn't happen with video games. In fact, the Xbox 360 already allows players to purchase videos by downloading them; why not enable game rentals this way?

Netflix recently came to an agreement with Warner Brothers to wait 28 days before allowing subscribers to borrow the studio's new releases, this in hopes of getting more people to purchase the DVDs. In return, Warner allowed Netflix access to a much larger portion of its catalog for streaming. Netflix is only getting more videos in streaming mode, and this should accelerate as more customers demand it.

While the loss of Saturday delivery could hurt Netflix and Gamefly today, in the long run it might not make one whit of difference.

Via:  CNN Money
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