You may not have read any news stories today about your Netflix (NFLX) subscription going up, but it will be, at least indirectly. While Netflix itself has not announced plans to raise its DVD-by-mail rates, the fact that the U.S. Postal Service has announced it is cutting out Saturday deliveries will in fact result in higher rates from Netflix on a per disc basis.
The reasoning is that Netflix customers will have four, sometimes five, fewer days each month to return or receive DVDs in the mail. This will lower the number of discs you can watch in a month, and as a result raise the cost you are paying per disc you can watch each month will be higher.
In today's online world, people do not rely on the Post Office as much as they used to. Instead of sending mail and greeting cards, we can send an email or e-card. As opposed to paying our bills each month with a check in the mail, we can handle all of our bills online. This has had a major impact on the Postal Service, which lost $15.9 billion last year.
Hoping to slow the bleeding, as of August 1 the Postal Service will no longer deliver mail to individuals or businesses on Saturdays. Package deliver will go on as usual.
It is still unclear whether or not Congress will have to approve the change, but with the amount of money that the Post Office loses every day, it is hard to imagine that the schedule changes will meet with too much resistance.
For Netflix subscribers, that means fewer DVDs by mail. The company's current DVD-by-mail plan allows for unlimited one-at-a-time DVDs costs $7.99 a month. With four or five fewer delivery days each month, the cost of each DVD just got a little bit higher.
Netflix did not respond to inquiries about this stealth price increase.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va. His articles typically cover big-picture events and forecasting what impact they will have on the stock market. In addition to writing for Fresh Brewed Media, Michael also wrote for AOL's BloggingStocks for three years, focusing most of his attention on the energy and technology sectors. Follow him on Twitter at @MFatMICenter.