Postal Service Looking to End Next-day Mail Delivery5 Dec, 2011 By: Erik Gruenwedel
Implementing up to a 72-hour delivery window would delay Netflix, Blockbuster by-mail disc rentals
The financially challenged U.S. Postal Service Dec. 5 said it is taking further steps to eliminate first-class, next-day delivery of letters, postcards and related items — such as Blu-ray Disc and DVD mailers — in an effort to save money.
Netflix is the Postal Service’s largest individual commercial mail client, generating more than $500 million annually in first-class postage revenue.
The USPS in September first announced intentions to possibly eliminate more than 250 mail processing centers, stop Saturday delivery and eliminate about 28,000 jobs, among other steps.
The USPS, which lost $5.1 billion in its most recent fiscal year, is looking to enact $20 billion in cost savings and return to profitability by 2015.
“The proposed changes to service standards will allow for significant consolidation of the postal network in terms of facilities, processing equipment, vehicles and employee workforce and will generate projected net annual savings of approximately $2.1 billion,” David Williams, VP of network operations, said in a statement. “This is part of the overall savings expected from the network optimization initiative, which is projected to save up to $3 billion by 2015.”
The changes, which must be approved by the Postal Regulatory Commission, would not go into effect until next April.
“Our network is simply too big to handle the revenues that are coming in today but, more importantly, way too big for what we're projecting in the future,” Williams said in a press conference.
A representative from Netflix, which increasingly has placed focus on its streaming service over its by-mail service, was not immediately available for comment.
On HackingNetflix.com, comments typically were negative, with vows that additional delays to disc shipments would result in more terminations of service if first-class rental disc delivery were compromised.
“If Netflix wants to survive they better look into providing new releases on a pay-per-view basis via streaming,” posted George S. “Adding another day or two to get movies in the mail would probably make me drop the service because the value would no longer be attractive. I may as well stream the new movies from Amazon or via satellite and pay for them individually.”
“I would hope that Netflix would either lower their rates, or bump the number of discs allowed at a time to compensate for this,” wrote Jonathan. “I don't mind paying the current rate for 8 or 9 movies a month, but if it drops to 4 or 5, Redbox is a much better option.”