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NET FLIX Free Resources
And speaking of technology...
And speaking of technology, that's one expense item that has dipped over the last two quarters. Want to guess why? Well, it's because what Netflix is doing isn't rocket science. We're talking about barriers to entry about the size of knee-high hedge bushes.
DVDovernight.com was drawing a decent crowd by renting out DVDs for $4 a pop, delivered and returned. Taking a page out of the Netflix playbook, it was able to seamlessly launch its Double Feature Club. For $39.95 a year, the company would waive its late fees on its $4 rentals. So, if you plan on renting out four DVDs or less a month, DVDovernight.com comes out cheaper than Netflix. And if you plan on renting more, well, maybe you're not doing Netflix any favors.
See, the company pays for first-class shipping and sends you a pre-paid envelope for the return. Postage and packaging are not cheap. As a matter of fact, with the post office set to hike rates from $0.34 for a first-class stamp to $0.37 by the end of the month, it's only going to get more expensive for Netflix to be booking all of these roundtrip flights. And the company is in a can't-win situation given its current pricing and business model, where educated consumers can either milk Netflix's free shipping policy to the company's detriment if they're active renters or join the "8 percenters" out the door this month for cheaper, greener pastures.
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