Some interesting analysis points out yet another reason Netflix is making the push to digital streaming. It's cheap.
Assuming that Netflix pays 3 cents per gigabyte transferred, the movie provider pays 6 cents to deliver an SD movie (1.8GB) and 9 cents to deliver an HD movie (3GB)—less if the film is under two hours, and less when streaming to PCs rather than Roku or Xbox 360 (since the PC stream uses lower bitrates).
Of course, these prices are for bandwidth only. Netflix still pays licensing fees for these films, the specific pricing arrangements of which no one really knows beyond the movie studios. But compared to Netflix's DVD shipping costs estimated at almost 80-cents per roundtrip, Netflix must be making out through electronic distribution. [Streaming Media via DSL Reports]