Is Netflix’s DVD by Mail Business Finally on Its Last Legs?
What’s the first clue that Netflix doesn’t particularly care anymore about its DVD-by-mail business? Nearly a decade ago, it tried to spin it off. Yes, we all remember Qwikster, the company’s 2011 plan to take the service that first put Netflix on the map, the DVD-deliveries-in-red-envelopes, and make it an independent subsidiary. But the plan was so ill-received that it was abandoned only months later.
In the nearly decade since the Qwikster debacle, Netflix has grown to massive heights, meeting the challenge of providing entertainment during coronavirus, putting out slates of Oscar-contending films, hit TV shows, documentaries, and standup specials every year.
As for the DVD-by-mail business? It’s still around, and now branded as “DVD.com, a Netflix Company.” But in the many major stories in the business and Hollywood trade press about Netflix, it’s rarely mentioned, and the company seems to only ever treat it as an afterthought.
The Neglected Child
Take what’s happening right now. For much of the last month, a disclaimer has been affixed to the top of the DVD.com homepage: “Your shipment may be delayed as the USPS is experiencing unprecedented volume increases and limited employee availability due to the impacts of COVID-19. We appreciate your patience.” I recently spent nearly two weeks waiting for a disc to arrive, for a newish movie I really wanted to see.
But this delivery debacle barely got any media attention at all.
The library of older titles seems to get thinner by the year…
I’ve been a Netflix disc subscriber since 2003, and I’ve kept up my subscription for a few reasons. The Netflix DVD library still has a lot of older movies that aren’t freely available to stream. At the end of each year, I often use my Netflix subscription to catch up on releases from earlier in the year. And I find it kind of amusing to go through and read my “History” tab – it turns out I’ve taken out 749 movies from Netflix, and it’s amusing to see what I watched in years long past.
But as of late, I’ve found less and less reason to keep it up. The library of older titles seems to get thinner by the year, and with streaming services proliferating, and it seems fewer new movies are finding their way to the disc service in a timely fashion.
Still 2 Million Strong
A Wired story last fall put the current number of Netflix mail subscribers at around 2 million, compared to over 6 million at the time Netflix first introduced streaming in 2007. At the end of the most recent quarter, Netflix had more than 195.2 million paid streaming subscribers worldwide.
Keeping the discs makes sense for a lot of people who live in rural areas and don’t have the best broadband, while some people are old-fashioned, prefer physical media, but don’t want to buy DVDs. The Wired piece also said that Netflix made $300 million in revenue from its DVD business in 2019 – compared to the $20 billion it made from streaming. Of course, many people get the discs but let them sit on a shelf for months at a time.
Netflix had more than 195.2 million paid streaming subscribers worldwide
Will Netflix eventually kill off its disc service? There’s a chance it eventually will, and Motley Fool argued late last year that it should. “We expect DVD subscribers to decline steadily, every quarter, forever,” that story quoted CEO Reed Hastings as saying, back in 2012.
Now it’s almost a decade later, and the discs still exist. There’s a chance Netflix hangs on to the business for sentimental reasons since it’s how they first got started. But it’s also clear that it’s not what “Netflix” means anymore. I’ll hang on for now, but probably not for long.