According to an article in the NY Times, the USPS isn’t happy with Netflix because their red envelopes must be sorted by hand. The US Postal Service estimates that the manual sorting of 1.6 million Netflix envelopes per day is costing them about $21 million a year.
As a result, the USPS wants to add a 17 cent surcharge to every package that requires hand sorting – including Netflix DVD envelopes. Tony Wible, a Citigroup analyst who wrote the report, says that the income that Netflix receives per subscriber would fall from $1.05 to 35 cents and that Blockbuster’s return mailing envelopes do not cause this problem. This could make a big competitive difference for the 2 companies.