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."
War against Netflix (Score:5, Informative)
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)
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)
...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)
Re:Unfortunately (Score:3, Informative)
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)
Last 15 Years List [cloudapp.net].
Requires Silver Light. It's pretty cool.
This is a known problem with Apple TV (Score:5, Informative)
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)
"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?