Netflix is going to stop offering its DVD rental service through the mail, which helped pave the way for the company’s lucrative streaming service, which currently has 232.5 million subscribers worldwide. The DVD service, which was once Netflix’s greatest profit generator, will deliver its final discs on September 29, putting an end to an innovative notion that began more than a quarter of a century ago. The DVD business generated the most profit for Netflix at one point.
Netflix stopped disclosing the number of subscribers who still utilized the DVD-by-mail delivery service years ago; nonetheless, the company’s DVD business earned revenue of $145.7 million in 2017, which indicates that approximately 1.1 million to 1.3 million customers still subscribed to the service. However, when the company’s video streaming service development slowed, it became clear that the DVD-by-mail service was a financial burden for Netflix. As a result, the company made the decision to discontinue offering the DVD-by-mail service.
The DVD-by-mail service offered by Netflix was discontinued in 2011, when the company had more than 16 million subscribers. Some people continue to subscribe to the DVD service despite the fact that the number of people doing so has substantially decreased over the course of time due to the fact that they have an interest in watching rare movies that are not typically available on video streaming platforms. The impending end of Netflix’s DVD service has prompted feelings of melancholy among longtime subscribers who enjoyed the company’s now-iconic red-and-white envelopes, which revolutionized the method in which people viewed entertainment in their own homes.
Ted Sarandos, co-CEO of Netflix, believes that the red envelopes were a trailblazer, spearheading the change from physical media to streaming services. In 1997, Netflix founder Marc Randolph tested the viability of the DVD-by-mail concept by sending a Patsy Cline CD to Netflix co-founder Reed Hastings through a post office in Santa Cruz, California. The purpose of this experiment was to determine whether or not a disc could be safely delivered by the United States Postal Service without being destroyed. The results of this test led to the launch of Netflix in 1998, which is a website that allows users to rent DVDs and get them in the mail.
The only country in which it was active, the United States, saw the Netflix DVD service ship out more than five billion CDs by the time there were just under six months left of the service. However, its demise brings to mind the tens of thousands of Blockbuster video rental outlets that closed their doors because they were unable to compete with the DVD-by-mail alternative offered by Netflix. Netflix relaunched its DVD rental service as DVD.com, which now operates out of a regular office in California. This was done when the company’s revenue continued to decrease.
In conclusion, Netflix’s decision to discontinue the DVD service represents the end of another era for the firm. However, given the continuous expansion of video streaming, the company may find that the withdrawal of DVD-by-mail will have little impact on its ability to concentrate more on increasing revenues. In a statement on their company blog, Sarandos recognized that their primary mission has always been to give the highest possible level of service to their customers; however, as the company continues to experience revenue declines, meeting this goal is becoming increasingly challenging.
