Netflix, with its neat little packets of DVDs, is running a national parcel distribution service on a massive scale, aided by the fast-crumbling U.S. Postal Service. So why doesn't Netflix buy-up the U.S.P.S and revolutionize it?
Herodotus penned the famous phrase "Neither snow, nor rain, nor heat nor gloom of night stays these courageous couriers from the swift completion of their appointed rounds" some 2,500 years ago, but now we're in the information age and the quote needs an addendum: "...except for the Internet." The rise of telecoms and Internet communications has seriously pummeled the USPS. Congress has begun hearings to consider cutting Saturday services, and cost-cutting moves are everywhere. It's basically following in the same footsteps of its cousin over the Atlantic--the Royal Mail, which has been making much of the same moves for years.
But over at his blog, David Strom, writer and 'Net expert, has taken the recent Netflix buyout rumors and turned them on their head: Netflix, he says, should take over the USPS. His reasoning is pretty sound:
- Netflix already is expert at sorting, distributing, and accepting parcels and has much of the infrastructure in place already
- Netflix has a revolutionary employee policy and has done an extraordinary job motivating its staff. It moves a phenomenal number of packets per hour with great accuracy
- Critical business-to-business mail largely circumvents the USPS anyway, preferring dedicated companies like FedEx--so the USPS would be more efficient if it focused exclusively on standard mail packets
- Netflix's DVD envelopes could be a model for standardized, postage-stamp-free mail packets. This means local post offices could close without upsetting people--if you can't fit something in a standard packet, you need to call UPS.
Compelling thinking, no? The key to Netflix is its standardization, which has facilitated its electronic product/packet tracking and sorting system, and taking this idea and applying it to the USPS is neat thinking. Standardization would make package sorting centers even more efficient, and that would save costs, which could be passed on to the consumer. The Netflix employee model would also be a revolution for USPS workers too--it's a kind of thinking that rarely manifests in big institutional companies and could be a highly motivating factor.
These are the exact same reasons why Netflix is such an object of fierce speculation in terms of potential mergers or acquistions. When you read "Amazon should buy Netflix" or "Netflix should buy Amazon," what people are really selling is the sophisticated model laying underneath what seems like a relatively simple DVD distribution business. Will the U.S. government privatize the Post Office and sell it to Netflix? Probably not. But as the USPS watches that flow of little red envelopes flow through its system every day, perhaps it should think more deeply about what it could learn about the business of getting mail from A to B most efficiently.
[via David Strom]