Netflix’s DVD-by-mail business has reached its expiration date.
In 1997, then-36-year-old Hastings started the company after Blockbuster charged him a whopping $40 late fee on his Apollo 13 DVD. At his company, subscribers could order DVDs online (no more than three a month), get them in the mail, and keep them for as long as they like without any late fees. The first DVD to be shipped—Beetlejuice—was mailed in a white envelope, but soon, the packaging changed to Netflix’s iconic red.
In 2007, the company launched its streaming service. Yet its DVD business kept going. Die-hard fans continued to subscribe to order hidden gems that aren’t widely available on demand. But the time to shut down the unit has come, as streaming has rendered DVDs almost obsolete. The DVD is an unlikely candidate for a vinyl-like comeback since it’s not quite vintage enough to spark nostalgia in older viewers nor artsy enough to attract hip buyers.
Netflix’s co-chief executive Ted Sarandos acknowledged the service’s role in the transition to streaming services. “Those iconic red envelopes changed the way people watched shows and movies at home—and they paved the way for the shift to streaming,” he wrote in a blog post yesterday (Apr. 18), admitting the DVD business has been shrinking. “To everyone who ever added a DVD to their queue or waited by the mailbox for a red envelope to arrive: thank you.”
Netflix will mail out the last DVD in the US—the only country the service has ever been available in—on Sept. 29.
Netflix added 1.75 million subscribers on its streaming platform in the first quarter of 2023, it disclosed in the earnings results posted yesterday (Apr. 18). The uptick was likely buoyed by a slew of factors:
📮 The ad-supported tier launched in November 2022, that’s bring down the basic package’s price by a third.
🔑 Kicking off its crackdown on password sharing in at least eight markets. It’ll expand to more, including to the US—its biggest market—by June, the company said.
The growth in subscribers’ numbers nonetheless marks a significant drop from the 7.66 million subscribers Netflix added in the last quarter of 2022. Netflix says some growth is lagging because it’s prioritizing slow-and-steady changes over rapid moves that disrupt customers. For instance, the ad-supported plan launched in just a dozen nations out of the 190-plus countries where Netflix is available. Moreover, the password-sharing rollout has been slow “to improve the experience for members.”
20 million: Peak subscriber count for Netflix’s DVD service in 2010, according to The New York Times.
5 billion: How many discs Netflix has mailed across the US, NPR reported.
$145.7 million: Revenue the DVD rental service generated for Netflix in 2022. The company doesn’t disclose the number of subscribers but The Associated Press pegs it between 1.1 million to 1.3 million based on average prices.
200+: Streaming services that exist as of 2022, some of them with Live TV
232.5 million: Netflix’s global subscriber base for its streaming service have hit a record high