Category Archives: USPS

Netflix pushes you away from discs


R.I.P., DVD.

Netflix, the former movie discs-by-mail company, has been on a growth tear lately, and now it’s all about streaming and avoiding the Post Office. In 2009 Netflix grew nearly 25% to 12.2 million subscribers, of whom 48% have tried streaming TV or movies at least once. The company makes healthy profits on its $1.7 billion in revenue, but more streaming would jack all that through the roof. Netflix has signaled as much with three major moves:

1. Netflix recently recast its subscription pricing to $8 a month for streaming or $10 a month for streaming plus discs — with streaming included in both options, clearly enticing you to go for the lower price point.

2. In early January, news broke Netflix will be added as a remote control button on Blu-ray players from Sharp, Sony, Panasonic, and other major home electronics manufacturers — putting video subscription by Internet in your hands whether you want it or not.

3. Yesterday Netflix announced it would no longer allow its users to manage their DVD queues via connected devices, such as Wiis — you can only set up DVD mailings via the web site.

Hmm. Pricing enticements, buttons on remotes, and forcing you to walk into the home office to pick a DVD mailing — Netflix obviously wants DVDs gone. The photo above of a Netflix distribution center hints why the company is interested in beaming movies over wires vs. sorting and shipping them by truck — imagine what all that costs.

As with any forced customer migration, there are risks. Analyst Richard Greenfield of BTIG Research told Home Media Magazine that Netflix might damage customer loyalty by pushing so hard away from mail, given that in Q3 2010, mailed discs still accounted for 41% of the home video rental market. But Netflix seems willing to take that chance, eyeing millions in freed up costs and a bet streaming video is the future.

When video goes postal: Apple shifting society


One hundred years ago the automobile transformed the world. People could drive long distances; Bonnie and Clyde held up remote banks thanks to speedy getaways on city-connecting roads; homes spread into the suburbs, long-haul trucks replaced trains, and now we have 40-mile commutes.

Could pocket video do the same thing? This thought was sparked by USPS’s funny new microsite in which a letter carrier chats amiably about how to hit your Christmas or Hanukkah shipping deadlines. Not novel, but the fact a staid government agency is toying with online video shows how prolific it’s become.

The Apple tablet will tip the video tide

Portable video — the capture, sharing and watching of moving images — is relatively new to society. Before this year, we always had to sit still. In 2009 Apple became the tipping point; it began adding videocams to tiny iPods and iPhones, and teens can now watch films on gumstick-size screens. (God forbid the action going on in college dorm rooms.) Now news emerged today that Yair Reiner, an analyst at Oppenheimer, has dug through the Apple production pipeline and found evidence the mythical Apple tablet will hit the streets in March or April of next year. Sure, Dell will launch an Android Tablet in 2010, too — but Apple will make it cool.

This story goes beyond gadget features, although we’re certain the Apple device will be sexy. Laura DiDio, top analyst at the Information Technology Industry Council, predicts the Apple tablet will have a large screen (the size of a sheet of paper), a crisper resolution than the iPhone, web access and a built-in web cam. Basically a glass pad that does everything.

So what happens to society?

1. Magazines and newspapers might be saved. They will begin to include video and interactivity, like this prototype from Sports Illustrated. The ailing publishing world will gain subscribers as it improves the quality of its content.
2. Television ratings will continue to fall, as fragmentation of viewing approaches infinity and print publishers get into the video game. We see hints of this with Nielsen recutting its panel ratings to include online video.
3. Augmented-reality views of the world may increase, like this stunning app for finding New York City subways.
4. The proliferation of two-way video could finally push down communication fees. AT&T and the like have been worried about Skype; when free international video calls are as easy as touching a pad in your pocket, consumers will lose patience for monthly $200 phone bills.
5. The convergence of the above — falling video costs, ease of image access, and augmented visual clarity — will finally shift society.

It’s a serious thought. Most human communication is nonverbal. If we depend upon our eyes to understand the world, when we can finally get visuals from anywhere with a portable screen, our growth becomes untethered from our physical reality. Telecommuting, a logical idea that has never scaled due to the human need to lock eyes and grip hands, could finally emerge as videoconferencing approaches the clarity of reality. Remote education, now available online in various college portals, could expand university enrollments (while threatening fees). Even the institution of human love, already migrating to online flirtations in Twitter and Facebook, could blossom into far-flung relationships in which you can do everything but touch your lover.

The only real puzzle is what Apple will call the tablet device. We bet “iPad” because it’s alliterative with iPod and iPhone, and Apple is too hip to do the “tablet” we expect. Too bad it isn’t on sale now; we’d ask the USPS to ship us one for Christmas.

Now, Pitney Bowes makes mail intelligent


Say you’re a marketer who drops $1 million a year on direct mail into homes, some of it First Class because you need to hit consumers in a timely manner and the delivery curve of standard-class mail can be unpredictable.

What if you could send standard mail instead, save hundreds of thousands of dollars, and still know exactly when the mail is hitting homes?

TrackMyMail.com, an “intelligent mail” firm recently acquired by Pitney Bowes, offers just this solution. The service takes the PLANET codes that allow USPS to track mail delivery and converts them into usable data for marketers. For example, mailings that promote time-sensitive sales dates could be monitored for delivery slippage, and if delays occur a marketer could increase radio to support the campaign. Call center staffing could be adjusted to match inbound responses tied to mail delivery, removing dreaded pinch points in the marketing sales funnel. Or in the perhaps the best use, marketers could coordinate other channels such as outbound email with the date mail is delivered in the home. “Check your mail today for our special offer” would certainly boost open and response rates.

Nice service. Worth a look if you run integrated campaigns that include direct mail. Tip via Marlene Ryan.

Photo: Timothy Lloyd

The U.S. Postal Service masks its direct mail


Sometimes design can save your product. Say, the new USPS presorted mail indicia that mimics a stamp … and hides the fact that the envelope is direct mail.

Why such subtlety? The United States Postal Service is under severe threat from diminishing mail volumes, especially bill presentment and payment as many companies encourage customers to pay online, so continues to push direct mail as an important marketing channel. USPS needs mail volume from marketers to help offset the cost of delivering cards to Aunt Virginia in Montana. (Hey, you make the drive for less than a buck.)

Alas, consumers often avoid “junk mail” by not opening it. They do this by scanning the envelopes and looking for those telltale “presorted standard” indicias — printed markings used instead of stamps on bulk mail. If it looks like junk, it goes in the trash.

So let’s examine the new presorted design. Clever — full color, with “USA” and stars looking very much like a stamp. The “presorted standard” message is dark gold, practically invisible against the blue. Glance at the envelope in a blur and you can’t tell if it’s a stamp, or not.

Hmm. Consumers won’t notice. They’ll open more envelopes. The direct mail response rates will be higher. Marketers will like this, compared to other media, and divert more funds to direct mail. Which will push up mail volumes. Clever, USPS. Very clever. But that’s cool, cause we still need you to deliver to our Aunt Virginia.

Dumbing down the blog


A friend of ours noted that this blog, while obviously brilliant and a must read, filled with revolutionary ideas such as the one below on saving the United States Postal Service with an entirely new marketing channel, is sometimes … too long.

So, as a gift to our friend, we turn to a more pressing issue. Why did Robert Zemeckis digitally enhance Angelina Jolie?

The U.S. Postal Service’s $200 million mistake


USPS should sell advertising on postage stamps. It’s missing at least $200 million in the next two months by not doing so.

Here’s the math: Advertisers are desperate to get into consumers’ homes. This year, between just Thanksgiving and Christmas, USPS will deliver 20 billion cards, letters and packages. So if the USPS could charge just 1 penny per delivery to sell advertising on the outside of all those paper communications, it would net $200 million.

Ah, critics grumble, it’s the government! It’s a poorly run business! Why should we let USPS advertise on envelopes?

First, USPS is already doing this. Back in 2006 Congress repealed a law banning commercial images on stamps, and USPS launched custom stamp products … which have basically gone nowhere. Trouble is, USPS ceded control of the program to four middlemen — Stamps.com, Endicia, Zazzle and Pitney Bowes — and each of these companies charge large mark-ups for the service. Kenneth McBride, Stamps.com’s CEO, told NYT back in May that he charges a 15 to 25 percent premium for stamp customization.

Second, we say critics are wrong. The U.S. Postal Service is an amazingly efficient machine, employing more than 700,000 people with the largest retail network in the United States. We challenge YOU to start a business where you deliver a piece of paper from Connecticut to California for only 41 cents.

USPS is threatened, and the outlook is not pretty. Package delivery firms such as FedEx have cherry-picked profitable corporate business; banks and companies are pushing consumers to electronic bill payment; consumers are sending email instead of mail … and at the same time, postal carriers have to walk farther. Every year the United States builds more homes and offices, adding delivery points equal in size to the city of Chicago. Imagine the bind McDonald’s would be in if it had to add 1,000 store locations in the U.S. every year while people were eating fewer hamburgers and french fries.

So, if USPS provides a valuable service, why not encourage underwriting by advertisers? USPS should take full control of the program, print the ad stamps itself, market it aggressively, and sign up big boys like Coke or Victoria’s Secret to fund millions of stamps at USPS retail outlets. Consumers wouldn’t blink; after all, we allow advertisers to underwrite our TV, radio, magazines and newspapers, why not First-class mail, too? The economies of scale would allow USPS to drive down costs, and if advertisers could jump in for 1 or 2 cents per stamp, the program would scale.

USPS could then expand the program with higher-margin advertiser services, such as large-stamp formats, peel-off coupons, specific home targeting, and confirmation of in-home delivery dates (say, allowing a marketer to send you an email the same day the mail offer arrives in your home).

Heck, mail might get interesting. It’s time for advertisers to go Postal.