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The Internet Businesses Entertainment Technology

Mail Service Costs Netflix 20x More Than Streaming 473

Jake writes "Netflix currently pays up to $1 per DVD mailed round trip, and the company mails about 2 million DVDs per day. By comparison, the company pays 5 cents to stream the same movie. In other words, the company pays 20 times more in postage per movie than it does in bandwidth. Doing some simple math, Netflix is spending some $700 million per year in physical disk postage. Rising content prices are offset by declining postage fees for the company, as more and more users choose the streaming-only option. Furthermore, subscriber revenues will continue to increase as Netflix increases the size of its streaming library."
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Mail Service Costs Netflix 20x More Than Streaming

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  • War against Netflix (Score:5, Informative)

    by GPLDAN ( 732269 ) on Wednesday January 19, 2011 @03:22PM (#34930890)
    Content providers are at war with Netflix, and Netflix is differentiating Classes of Service depending on hardware used.

    How I do I know? Same way you could know if you did the research. I have a Wii, a PS3 and Apple TV. Hook them up to a FastE hub, or a FastE switch that supports SPAN. Attach wireshark on a laptop.

    Start the Netflix viewer on each device. Note that they each have different data centers that they reach out to. Always.

    Traceroute to these IP addresses. Note that the Apple one in particular is congested at the last hop.

    That is why the Netflix service sucks using the ATV2 unit.

    So you have Netflix giving different hardware manufacturers different experiences - AND - you have bandwidth providers (mainly cable) trying to kill Netflix outright by rate shaping the traffic.

    If I were Netflix, I wouldn't put those DVD burners on Ebay just yet...
  • Too bad In Canada (Score:5, Informative)

    by future assassin ( 639396 ) on Wednesday January 19, 2011 @03:24PM (#34930930)

    SHAW and ROGERS are pushing hard to penalize people for using services like Netflix with their new caps and $1-2 per gig for going over. CRTC+SHAW+ROGERS+BELL= Consumer shafting FTW!

  • Re:Margins (Score:5, Informative)

    by 99BottlesOfBeerInMyF ( 813746 ) on Wednesday January 19, 2011 @03:27PM (#34930964)

    ...wouldn't they still need some special license to rent out the DVDs?

    No, the media companies lost that battle long ago.Legally you can rent out movies you own, so long as you have the physical media, aren't copying that media, and aren't renting them for public viewing.

  • Re:Margins (Score:5, Informative)

    by kdawgud ( 915237 ) on Wednesday January 19, 2011 @03:28PM (#34930990)
    First sale doctrine says they can do whatever they want with the DVDs once they buy them...
  • Re:Unfortunately (Score:3, Informative)

    by h4rr4r ( 612664 ) on Wednesday January 19, 2011 @03:43PM (#34931214)

    They actually have lots of pretty decent indie and foreign films. If you really must have something that Michael Bay directed you can always get the DVD.

  • Re:Unfortunately (Score:4, Informative)

    by genghisjahn ( 1344927 ) on Wednesday January 19, 2011 @04:00PM (#34931440) Homepage
    Here's a list of movies available on Netflix Instant that have been released in the past 15 years...

    Last 15 Years List [cloudapp.net].

    Requires Silver Light. It's pretty cool.
  • by alispguru ( 72689 ) <bob@bane.me@com> on Wednesday January 19, 2011 @04:22PM (#34931764) Journal

    Apple TV uses a bad setting for DNS by default. See here [appleinsider.com] for a description of the problem and solutions.

    It's not Netflix's fault, surprisingly enough.

  • Re:Duh? (Score:5, Informative)

    by Duradin ( 1261418 ) on Wednesday January 19, 2011 @06:02PM (#34933184)

    "However, being required to do it 6/7 days is not. I don't think that was even required back then."

    If 6/7 days is too much for you did you know they used to deliver three or four times a day in some major cities?

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