Netflix, the company that revolutionized the way we watch movies and TV shows, is shutting down its DVD mailing business after 25 years of operation. The company announced on April 18, 2023, that it would be ending its DVD-by-mail rental service, which set the stage for its trailblazing video streaming service. The final Netflix DVDs will be shipped out on September 29, 2023, according to co-CEO Ted Sarandos.
The End of an Era
Netflix’s DVD-by-mail rental service was launched in 1998, and it quickly became a popular alternative to traditional video rental stores like Blockbuster. The service allowed customers to rent DVDs online and have them delivered to their homes by mail. Customers could keep the DVDs for as long as they wanted and return them in prepaid envelopes when they were done. The service was a huge success, and it helped Netflix grow into the company it is today.
However, with the rise of video streaming services, the demand for DVD rentals has declined steadily over the years. Netflix’s revenue from the DVD-by-mail business has steadily declined over the years, as the company wanted to push members toward the streaming service. In 2022, the DVD service generated $145.7 million in revenue, which translated into somewhere between 1.1 million and 1.3 million subscribers, based on the average prices paid by customers. In contrast, Netflix ended March 2023 with 232.5 million worldwide subscribers to its video streaming service.
Over the past 25 years, Netflix has shipped more than 5.2 billion DVDs. Today, the service still has fewer than 1 million subscribers. Tomorrow, they will receive the last batch of discs. At that time, some users will also receive 10 DVD discs as a souvenir.
The Decision to Shut Down the DVD Mailing Business
Netflix’s decision to shut down its DVD mailing business was not an easy one. The company had been operating the service for 25 years, and it had a loyal customer base. However, the DVD business had been shrinking, and the company felt that it would not be able to continue to offer quality service. In a blog post announcing the decision, Netflix co-CEO Ted Sarandos wrote
“Our goal has always been to provide the best service for our members, but as the DVD business continues to shrink, that’s going to become increasingly difficult. Making 2023 our Final Season allows us to maintain our quality of service through the last day and go out on a high note”.
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In 2011, Netflix made a key decision to separate its DVD side of the business from its streaming business. Today, Netflix’s streaming business has 238 million subscribers and an annual revenue of $31.5 billion.
When Marc Randolph, the first CEO of Netflix and Reed Hastings, Chairman Board of Trustees of Netflix were planning the service, the DVD format was still an emerging technology. At the time, there were only about 300 movies to choose from. At its peak, Netflix had more than 100,000 shows.
Randolph said: “We knew from day one that DVD would disappear, that this would be a short-lived step. But, miraculously, it did the job. It was like an unnamed booster rocket that Netflix went into orbit and then landed back on Earth 25 years later. That’s pretty impressive.”
What It Means for Netflix and Its Customers
The end of Netflix’s DVD mailing business marks the end of an era for the company. However, it is not expected to have a significant impact on the company’s overall business. The DVD service generated only a small fraction of Netflix’s revenue, and the company has been focusing on its video streaming service for years.
For Netflix’s customers, the end of the DVD mailing business means that they will no longer be able to rent DVDs by mail. However, the company’s video streaming service will continue to operate as usual. Customers who have both a DVD and streaming subscription will automatically have their DVD subscription cancelled. This will happen on the last shipping day, September 29, 2023. Customers who still have DVDs at home can keep them for as long as they like. They will not be charged for any unreturned discs. If they want to return any discs, they can do so until October 27, 2023
Conclusion
Netflix’s decision to shut down its DVD mailing business marks the end of an era for the company. The service, which was launched in 1998, helped Netflix grow into the company it is today. However, with the rise of video streaming services, the demand for DVD rentals has declined steadily over the years. The end of the DVD mailing business is not expected to have a significant impact on Netflix’s overall business. The company has been focusing on its video streaming service for years. The end of the DVD mailing business means users will no longer be able to rent DVDs by mail. However, they can continue to enjoy the company’s video streaming service.
