Netflix bids farewell to its iconic red-and-white DVD envelopes
Netflix, the streaming giant that has revolutionized the way we watch TV and movies, is saying goodbye to its DVD-by-mail service, which started 25 years ago and changed the video rental industry.
The service, which allowed customers to rent DVDs from a library of over 100,000 titles and receive them in red-and-white envelopes, will end on Friday as the company focuses on its streaming business.
The DVD service was a disruptive innovation that challenged Blockbuster and other video stores, and also paved the way for Netflix’s streaming success. Netflix was able to use its DVD-by-mail service to build a relationship with customers and gather data on their viewing preferences, which helped it create personalized recommendations and original content for its streaming platform.
“We realized that the DVD business was going to be a great stepping stone into streaming,” said Ted Sarandos, Netflix’s co-CEO and chief content officer.
At its peak in 2010, the DVD service had 20 million subscribers and generated more than $2 billion in revenue for Netflix. However, the DVD service became less popular and profitable over time, as streaming options increased and customer preferences changed. By the end of June 2023, the DVD service had only 1.3 million subscribers and accounted for less than 1% of Netflix’s revenue.
The reason why it lasted as long as it did is because there was this long tail of content that was not available on streaming,” said Dan Rayburn, an analyst at Frost & Sullivan who covers the streaming industry.
Netflix decided to shut down the DVD service after it became too costly and difficult to maintain. The company had to deal with rising postage fees, declining disc sales, aging equipment, and shrinking warehouse space. The company also faced competition from other DVD rental services, such as Redbox, which was co-founded by one of Netflix’s former executives.
“It was a very important part of our history, and I’m really proud of what we did with DVD,” said Mitch Lowe, one of the co-founders of Netflix’s DVD service who later became the CEO of Redbox.
The remaining DVD subscribers will be able to keep the last discs they receive as a farewell gift from Netflix. Some of them are loyal customers who have been with the service for years, while others are in rural areas or have poor internet service that makes streaming difficult.
“I’m going to miss it terribly. It’s like losing a friend,” said Scott Sofield, a longtime DVD subscriber who lives in the mountains of Colorado.
Netflix’s DVD-by-mail service may be gone, but it will not be forgotten. It will remain as a legacy of how Netflix transformed the entertainment industry and how we consume media.
Relevant articles:
- Netflix’s DVD-by-mail service bows out as its red-and-white envelopes make their final trip, AP News, September 28, 2023
- Netflix’s DVD service ends after 25 years, BBC News, September 29, 2023
- Netflix’s DVD-by-mail service is shutting down after 25 years, CNN Business, September 28, 2023
- Netflix’s DVD service is ending. Here’s what to do with your discs, CNET, September 28, 2023.
Originally published at https://trendydigests.com on October 16, 2023.
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