After 25 years, Netflix’s original business is shutting down. The company has revealed that it will be “lowering” DVD rentals (ie DVD.com), with its latest movie discs shipping in the mail on September 29. Simply put, declining demand for physical rentals makes it “increasingly difficult” to deliver the quality of service that the company wants.
Netflix released their first album (beetlejuice, if you’re curious) in 1998. Since then, it has shipped over 5.2 billion movies in its exclusive envelopes (almost all before 2019) to over 40 million customers. You probably know the story after that. The company started streaming video-on-demand in 2007, and that business grew fast enough to become Netflix’s dominant offering. After an early attempt to spin off mail-order rentals like Qwikster in 2011, Netflix moved them to DVD.com in 2016. At the time, the company was already producing original streaming shows.
There’s also a financial incentive to ditch record rentals. While Netflix is reeling from a dismal 2022, its first-quarter earnings were even worse than a year ago. Subscriber growth was also relatively modest, with 1.7 million new users. The decision to eliminate the DVD drive by mail could help Netflix cut costs, even if the savings are relatively small. The record market has been in steep and steady decline for years, according to VideoScan/MediaPlayNews data: sales alone fell 19 percent between 2021 and 2022.
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