Riverboat

Netflix Faces These Six Challenges

NetFlix has a great customer service reputation and enjoys increasing word of mouth advertising, the best and least expensive variety. It's service is very convenient and requires no new hightech equipment or broadband service.

The postal increase is trivial. Figure .06 increase for the round trip, and estimate 2 movies a week.
That's $6.25 a year added cost of which I believe customers will absorb all or most with no reservation.
NetFlix could probably pass along a 4 movie per week cost increase - $12.50 - to it's more active, premium members.

Wal-mart is a legit competitor with it's low cost of DVD ownership. Netflix has thousands of titles just a mailbox away. You call the winner. I'd be cautious about shorting NetFlix.