- Netflix will shut down its DVD-by-mail business in September 2023, having shipped more than 5 billion rental units to subscribers in the United States since 1998.
- Netflix’s revenue from the DVD business has been on the decline, accounting for just 0.5% of the company’s total revenue in 2022.
- Netflix launched video streaming in 2007 as part of its DVD-by-mail subscription business.
Netflix’s famous “red envelopes” will be part of history in September 2023 when the company, now dedicated almost exclusively to streaming, ships the latest DVDs.
Indeed, Netflix announced the closure of the DVD business by mail this Tuesday, April 18, before its earnings report of the first trimester.
Since 1998, according to the company, it has mailed more than 5 billion rental DVDs to subscribers in the United States.
Netflix’s latest DVDs will ship on September 29, the company’s co-CEO Ted Sarandos said.
“After an amazing 25 year history we have decided to shut down DVD.com, it will be at the end of this year,” Sarandos wrote. in a company blog post.
“Our goal has always been to provide the best service to our members, but as business continues to shrink, it will become increasingly difficult. So we have decided that we will ship our final DVDs on September 29,” he added.
Netflix DVDs
Netflix’s revenue from the DVD-by-mail business has been in decline for years, as the company has focused almost exclusively on serving its streaming segment, where it dominates the global market.
In 2022, the DVD business generated $146 million (20 percent less than the previous year), representing just 0.5 percent of the company’s total revenue.
“Since we were born, our subscribers have loved the possibility of a wide variety of titles and the possibility of binge-watching entire series,” Sarandos wrote.
DVDs also led to Netflix’s first foray into the original programming business, with titles from Red Envelope Entertainment including “Sherrybaby” and “Zach Galifianakis Live at the Purple Onion.”
Netflix and a new business model
Netflix first launched video streaming in 2007, which was originally part of its core DVD-by-mail subscription business.
In 2011, it made the ill-advised decision to separate Netflix streaming from the renowned DVD-by-mail business (Qwikster), a marketing move the company reversed a month later after massive cancellations.
“We feel privileged to have been able to share movie nights with our DVD subscribers for so long, proud of what our employees have accomplished and excited to continue serving entertainment fans for many decades to come,” said Sarandos. And he added: “To everyone who has ever rented a DVD on Netflix or waited by the mailbox for a red envelope: thank you.”
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