Netflix Predicts Peak Mail Order Business Within The Next 5 Years

The strategists over at Netflix have proclaimed that they expect their mail order business to reach its zenith within the next decade. We get the following scoop from the business caves of Yahoo:

“We think the by-mail business is very strong but will probably peak in the next five years,” said Hastings at the Netflix Investor Day in San Francisco on Wednesday. A slide at the presentation showed the peak in five to 10 years. Hastings told investors that the company’s online investment in 2008 and 2009 is expected to be “fairly inefficient,” but noted the reason for higher spending was to cultivate better partnerships and content.

But Hastings and other company executives were bullish on the company’s long-term position given its successful expansion into the streaming DVD market. “Once we’re in streaming … we can attract well beyond 20 million subscribers worldwide,” he said.

Netflix knows they will peak and eventually start to lose business on the mail order front; so they have already begun to use their earnings in order to prepare for the future. This is smart business. Their ability to adapt and see change on the horizon should insure that this company remains for years to come. Streaming on demand services are only going to get more and more convenient, and the battle for this market will start to heat up in time.

I very seldom get excited when companies make announcements about their future plans…. I think Apple and Netflix are the only exceptions. I like the forward thinking of these corporations. They don’ t sit on their laurels and milk products till something better comes out from a competitor - they launch a product and then follow it up with a better one (before anyone expected it). This is how you do business in the information age my friends.