Apparently Netflix stopped shipping DVDs on Saturdays last month, and not too many people seemed to notice. This move has been a few months in the works because Saturday is traditionally a low-volume shipping day for the service. The company has no plans to go back to shipping DVDs over the weekend, and it has officially made it known to subscribers.
"Saturday DVD shipments have been tapering for over a year and ended in early June," said Netflix Spokesman Joris Evers. In the change, Netflix is stopping its weekend deliveries to reduce costs so customers that order their DVDs on Saturdays will now receive their orders on Monday.
It is unclear how this will affect Netflix's bottom line, but the company's stock is up 67% since mid-July of 2013. The robust earnings of its stock may take a dip once its loyal user base realizes that there are no more Saturday deliveries. The company has seen a healthy growth in its streaming service thanks to streaming devices becoming more and more popular.
The move by Netflix could trigger a bump in competitors' business, most notably the DVD distribution machine Redbox. Whether or not this new move will affect its subscribers and their viewing patterns remains to be seen. The Los Gatos, California-based company estimates that its shipping costs would be $140 million in 2014 and $117 million in 2015. The savings that Netflix may have due to the end of Saturday shipping could be significant to the company's bottom line.
"By doing this you end up taking some costs out of the system, which is needed as they get fewer and fewer subscribers on DVD. They probably feel that they are at a point where the people who are subscribing are just going to continue to leave whether or not they're getting DVDs on Saturday," Janney Montgomery Scott Analyst Tony Wible told the Los Angeles Times.
This shift for DVD delivery does not mean that the DVD service will be ending anytime soon as long as it remains to be profitable.
"It's generating cash for them, which they're using to buy stuff for the streaming side of the business, and I suspect that they'll continue to do that until they lose enough subscribers that it's at break-even," continued Wible.
It sounds like Netflix is very aware that its future most likely lies with streaming content to its subscribers. The company continues to be the flagship of the new "video rental" business, but loyal users may now have to get their DVD fix before the weekend.
