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NetFlix corresponds with customers by E-mail
THE EMERGENCE of DVDs and E-mail-based customer service technologies could unlock a lucrative business model for online retailer NetFlix.com in Scotts Valley, Calif NetFlix.com was established a little more than a year ago to target an untapped niche in the electronic-commerce market: movie rentals.
Because of the bulk and cost of delivering VHS tapes, renting tapes over the Web wasn't a popular business option, said Jim Cook, chief technology officer and director of operations at NetFlix.com. "It wasn't worth the shipping costs for a $4 rental," he said.
But the small, easy-to-ship format of digital video disc (DVD) makes the product a better vehicle for renting movie titles online, officials said. The discs cost between $zo and $30 each to buy and between $3 and $5 each to rent, plus shipping and handling charges.
One disc weighs less than 2 ounces and costs about 55 cents to ship via the U.S. Postal Service. "We're dealing with...