Wired Features Netflix in Green Business Story

Wired featured Netflix in a story about companies using technology to change an old system (video rental) to be less damaging to the environment, Sustainability Scorecard Shows Green Business Has a Long Way to Go.

NetFlix is a prominent example of a company that leveraged web technology to create a new movie-rental system. Some environmental thinkers credit Netflix with eliminating millions of tons of CO2 emissions from consumers driving to video-rental stores.

"The leading edge of sustainability is companies that have realized that green isn't simply about improving the bottom line; it's a way of growing the top line through new markets, new business models," Makower said. "And that's where technology companies can lead the way not just in inventing new solutions, but new systems."

From the Netflix website: "If Netflix members drove to and from a rental store, they would consume 800,000 gallons of gasoline and release more than 2.2 million tons of carbon dioxide emissions annually."

Comments

[David Grenier]

While I'm sure Netflix has helped eliminate some driving, I think their case is a bit overstated. First, consider that many folks in urban areas may not drive to a video store. They may walk, bike, or take public transit. I know for most of my adult life I never drove to a video store - there was always one within walking distance whether I lived in Providence, Pittsburgh, or Seattle.

For folks that do drive, chances are often picking up movies as part of a bunch of errands. They are stopping on their way home from work or going to the Blockbuster that's in the same plaza as the grocery store when they go shopping, etc. Those customers will still drive to the grocery store (or wherever), they just won't also be picking movies up while they are there.

To be sure, there are a certain amount of car trips just to go to the video store that are avoided through netflix use, but I don't think netflix is really saving 2.2 tons of CO2 every year.

It has cut down my driving and made it easier to rent. The nearest store is about 3 miles away. A couple years ago they raised their rental price from .99 to $3.49, so I signed up for Netlix and have been using it ever since. I occasionlly use a store now, but that's pretty rare. I've recently moved and now live even farther from the video place.

A real planet saver is on bike with an acoustic guitar for entertainment and a solar light. He aint watchin' movies on his 46" plasma with surround, etc.

[biketrails]

I think the key word in the statement from the Netflix website is IF. It does not state that all subscribers would be driving to a video store if they were not members.

They have to be making some significant assumptions to come up with those numbers. Here are just a few variables that they needed to guess at:

How far is a person driving to the video store?
What is the gas mileage of their vehicle?
How many times a year do they make that trip? twice a week, three times a week, once a month?

I happen to be a transportation planner and this really got me thinking. I took a moment to do some quick calculations and here is what I came up with. (I know this is really geeky, but just bear with me) Taking the 800,000 gallons of saved fuel they claim and dividing that by the Corporate Average Fuel Economy (CAFE*) standard of 27.5mpg you come up with 22 million miles that could have been driven using that much fuel. If you divide 22 million by the number of Netflix subscribers stated in the last earnings report (about 7.5 million) you come up with 2.93 miles. This means that they are assuming every subscriber is driving 2.93 fewer miles annually because of their Netflix membership. For many that is less than one trip to the video store. I imagine that the fuel and emissions savings is actually significantly higher than what they claim.

Here is the math for those who are interested:

800,000 gallons of fuel * 27.5mpg = 22,000,000 miles
22,000,000 / 7.5 million subscribers = 2.93 miles per subscriber

There are lots of other factors to be considered, but overall I think their claim holds up to scrutiny.

* http://www.nhtsa.dot.gov/cars/rules/cafe/overview.htm

[biketrails]

Oops. I made a mistake in the last post. The paragraph about the math should indicate MULTIPLYING the gallons of fuel saved by the CAFE standard.

The equations are correct, I just explained it incorrectly in the text.

This did get me wondering, how far and how often did you drive to the video store before you were a Netflix member? For me it was about 2 miles one way and I did it about twice a month.

[Old Timer Too]

Hm, considering that before NF & BB, I only purchased films (never rented them), my joining NF didn't make any change that would impact the ecology.

I actually think that the figures are low (as far as total miles are concerned and also actual fuel consumption. Not to argue, but to toss in a couple of additional variables -
1. starting the car twice consumes more fuel.
2. "city" driving consumes more fuel.

The mileage figure of 27.5 is about right for my Honda CR-V on the highway. It is closer to 22.5 for city driving.

I think maybe the savings is understated.

Thoughts? And thanks for the "geek" figures. They help us better understand the claim.

[bumpershine]

Does Netflix demand that their suppliers ship their rental DVD's without cases and inserts thus reducing the amount of packaging waste that heads straight to the landfill?

[jeff-chi]

So does throttling help to conserve gas too? (sorry, I couldn't help myself)

[Plus]

This green bullshit pisses me off!

[biketrails]

Old Timer Too,

I agree that 27.5mpg is probably a little high, but I wanted to use a number from an credible source, and for this CAFE seemed as good as any. I think 22mpg or lower is more in line with reality. City vs Highway driving is a good point too.

You mentioned some other factors and I think those all need to be considered as part of a thorough analysis but I wanted to keep this as simple as possible. I just wanted to see if the claim seemed reasonable.

[Old Timer Too]

Thanks for your post. It certainly helped the rest of us look at the overall picture.