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Why Internet is no threat to post office

In fact, it has led to more old-fashioned mail

MILLIONS OF people now rent their movies the Netflix way. They fill out a wish list from the 50,000 titles on the company's Web site and receive the first DVDs in the mail; when they mail each one back, the next one on the list is sent.

The Netflix model has been exhaustively analysed for its disruptive, new-economy implications. What will it mean for video stores like Blockbuster, which has, in fact, started a similar service? What will it mean for movie studios and theatres? What does it show about "long tail'' businesses — ones that amalgamate many niche markets, like Dutch movies or classic musicals, into a single large audience?

But one other major implication has barely been mentioned: what this and similar Internet-based businesses mean for that stalwart of the old economy, the U.S. Postal Service.

Every day, some two million Netflix envelopes come and go as first-class mail. They are joined by millions of other shipments from online pharmacies, eBay vendors, Amazon.com and other businesses that did not exist before the Internet.

The eclipse of ``snail mail'' in the age of instant electronic communication has been predicted at least as often as the coming of the paperless office. But the consumption of paper keeps rising. And so, with some nuances and internal changes, does the flow of material carried by mail. "Is the Internet hurting the mails, or helping?'' asks Michael J. Critelli, a co-chairman of the public-private Mail Industry Task Force. "It's doing both.''

Critelli's day job is chief executive of Pitney Bowes — yes, that Pitney Bowes, once known for its postage metres and now a ``mail and document management'' company. In the last few years, it has also functioned as a research group for the mail industry, commissioning a series of studies, available free at PostInsight.PB.com, that contain startling findings about the economic, technological and cultural forces that affect use of mail.

The harmful side of the Internet's impact on the mails is obvious but statistically less important than many would guess. People write fewer letters when they can send e-mail messages. But even before e-mail, personal letters had shrunk to a tiny share of the flow.

Personal letters of all sorts, called ``household to household'' correspondence, account for less than 1 percent of the 100 billion pieces of first-class mail the U.S. Postal Service handles each year. Most of the personal mail is greeting cards, invitations, announcements and other mail with ``emotional content,'' a category that is generally holding its own.

The same higher-income households that rely the most on e-mail correspondence also send and receive the most letters. Whatever shrinkage e-mail has caused in personal correspondence, it is not likely to do much more. The Internet and allied technologies, meanwhile, are increasing the volume of old-fashioned mail in many ways.

The first follows the Netflix example. Again, people are more and more willing to make payments online, but that they strongly prefer to receive the bills on paper, by mail. Third is the increasing sophistication of the Postal Service's own technology.

New York Times News Service

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