Seriously, Could Someone Explain to Me how Netflix Turns a Profit?
May 2, 2011
Stamps, what the hell? I suppose it’s a way for the postal service to make money. In that way I suppose they’re justified. One moment, I’m thinking of a better jumping off point. … … … Okay I got one!
Postage! What the fuck? I’m a good guy, I pay my bills. Every month I send AT&T a check for my phone service and Best Buy a check for my card there. I get my bill, open it up, see how much I owe, write a check and then mail it back to them in the included return envelop, but only after I put a stamp on it. You see it’s that stamp that pisses me off. For all the money I pay them you’d think they could pay for the postage on the return envelop. I suppose I could do all my billing online, but truthfully I’d rather get a paper bill, that way I know when the money is being taken out of my account, because I played a physical role in it. Just the way I am.
So you may ask why bother complaining about all of this? Why make a comic about this? What’s the punch line? Well I’ll tell you why!
Netflix. I pay Netflix $8.99 a month, and for that $8.99 I get unlimited video streaming and one DVD at a time. I tell Netflix the DVD I want and they ship it to me, and in the shipping is a return envelop, WITH POSTAGE PAID! No stamp necessary! Now think about this. At 44 cents a stamp, if you get 11 DVD’s from Netflix a month on the $8.99 deal, which is possible the return time on Netflix is incredible, but I digress. If you get 11 DVD’s, with Netflix paying for the shipment both ways, that’s $9.68, a 69 cent loss to them. So I ask, considering the cost of the actual DVDs, and the cost of the rights to stream the content they can stream, plus the postage they pay to ship the DVDs, how does Netflix make a profit?