Netflix Kicks 2013 Off With a Bang

Netflix (NASDAQ:NFLX) hasn’t had an easy two years: Chief Executive Officer Reed Hastings’s 2011 decision to separately price the company’s DVD and streaming services caused shares to fall 80 percent from their high of $298.73, and the company endured pressure from shareholder Carl Icahn to sell itself for much of last year. But the video streaming service began 2013 on an upswing, with shares rising just above the $100 mark in the first two weeks of the year on news of a content deal with Time Warner’s (NYSE:TWX) Warner Brothers Televisions Group.

Aside from the content additions, a few other events have affected Netflix this week:

GameFly Inc v. Postal Regulatory Commission

A federal appeals court ruled on Friday that Netflix’s DVD-by-mail business has an unfair advantage over similar services, reported The Wall Street Journal. Netflix, which is the United States Postal Service’s biggest DVD mailer, purportedly receives preferential treatment; its discs are hand-sorted by USPS workers for no additional charge instead of being passed through the automated mail processing system, which can damage DVDs. Video-game mailer GameFly alleged that it had not been given that option, and as a result, it has had to find different methods to protect its mailings…

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In its lawsuit, GameFly asked for USPS to manually sort its mailings as it does for Netflix and reduce the rates for its flat-shaped DVD shipments. However, instead of granting the video-game mailer’s requests, the U.S. Court of Appeals backed a recommendation made by the U.S. Postal Regulatory Commission that would require the Postal Service to remove a 20-cent surcharge for DVD mailings exceeding one-ounce. The proposal made no mention of changing how the USPS handles Netflix’s discs.

1988 Video Privacy Protection Act Updated

President Barack Obama placed his signature on House Resolution 6671, approving an amendment to the original act that will allow Internet video services, such as Netflix, to obtain customer consent to share their viewing histories on social networks like Facebook (NASDAQ:FB). The updated version of the law will be a significant benefit for Netflix, as the new disclosure provisions will allow users to promote the service by sharing their viewing habits with social network contacts.

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