Netflix, Inc. (NASDAQ:NFLX) shares are little changed after the company said Wednesday it has ended Saturday shipments of DVDs to its DVD subscription customers in an effort to cut shipping costs. Many believe the move indicates the company will wind down its DVD business, which has lost about 25% of its subscriber base in Q4 2013 from Q1 2012, and focus purely on streaming.
The decision to end Saturday shipments could save the company as much as 10% annually on “the money it spends to send and receive DVDs to and from customers,” the L.A. times noted citing Janney Montgomery Scott analyst Tony Wible. Wible said the move could save Netflix $14 million in 2014 and $12 million in 2015.
The end to DVD subscriptions also are being weighed against what some believe is a great future with streaming. Experts think NFLX can easily add 1.5 million additional U.S. subscribers in its Q3 by completely focusing on new subscriptions and online video content generation, according to TechInsider. Worldwide availability of NFLX service is also a huge factor its earnings, the story notes.