According to the New York Post, the Brooklyn Public Library is pursuing a deal with Netflix for the online rental service to provide circulating copies of DVDs to the library's patrons. The cost to patrons would be the same as it is for DVDs they take out from the library's stock -- free. The cost would be borne by the library instead of the costs of purchasing, maintaining, and circulating its own inventory.
The economics of such a relationship would be interesting. Drawing from Netflix's inventory would allow the library to offer more titles than it could by buying its own inventory. But the cost of maintaining that inventory would be much lower for Netflix, which can smooth out variations in demand over its 6.3 million subscribers. The non-inventory costs for Netflix -- processing the order, shipping the disks, processing returns -- may not be more than the analogous costs for the library, which might allow Netflix to price the service at a level that would keep the library's costs low and allow Netflix to make a profit.
The economics of such a relationship would be interesting. Drawing from Netflix's inventory would allow the library to offer more titles than it could by buying its own inventory. But the cost of maintaining that inventory would be much lower for Netflix, which can smooth out variations in demand over its 6.3 million subscribers. The non-inventory costs for Netflix -- processing the order, shipping the disks, processing returns -- may not be more than the analogous costs for the library, which might allow Netflix to price the service at a level that would keep the library's costs low and allow Netflix to make a profit.
