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NETFLIX MAY BE HIT HARD BY USPS REVAMPS

November 16, 2010 by · Leave a Comment 

With reports circulating that the U.S. Postal Service is about to raise its postage rates and halt Saturday deliveries, analysts were weighing in on Monday with appraisals of how the overhaul would affect online DVD renter Netflix and the smaller Blockbuster By Mail. In an interview with Home Media magazine, Wedbush Securities analyst Edward Woo said that while the postal changes would be “bad” for the DVD mail services, “they aren’t critically bad and likely won’t change the tide of subscribers moving to Netflix.” Netflix, according to the magazine, is already the USPS’ largest individual customer, worth $600 million in annual postage fees. However, with a projected $6.4 billion loss in 2010, the postal service is seen as an underwriter of Netflix’s operations. In July Netflix supported a 7-percent hike in USPS postal fees, saying, “Netflix believes a stronger, more viable Postal Service with predictable service and affordable rates is preferable to a weakened Postal Service.”