Netflix to stop its DVD-by-mail service
After 25 years, Netflix is ending its DVD-by-mail business.
Before it was upending the entertainment industry and ushering in the streaming era, Netflix was a company whose business model revolved around sending DVDs through the mail in easily recognizable red-and-white envelopes. At its peak in 2010, roughly 20 million people subscribed to the DVD service. But the practice has long felt anachronistic, and the company said Tuesday that it will ship its final DVDs to customers Sept. 29.
How many customers? Netflix doesn’t break out those numbers any more. But whoever they are, it’s time for them to dust off any DVDs they might have lying around and send their red envelopes back to Los Gatos, Calif., where they can be retired to the landfills for good.
“Those iconic red envelopes changed the way people watched shows and movies at home — and they paved the way for the shift to streaming,” the company’s co-CEO Ted Sarandos said in a letter. “To everyone who ever added a DVD to their queue or waited by the mailbox for a red envelope to arrive: thank you.”
The letter also noted some DVD trivia: “Beetlejuice,” starring Michael Keaton and Geena Davis, was the first DVD shipped by the company in March 1998. The most frequently requested DVD was the feel-good film “The Blind Side” starring Sandra Bullock. The company has sent out more than 5.2 billion DVDs over the years.
Netflix made the DVD announcement as part of its earnings report for the first quarter after the market close Tuesday. Drafting off a strong fourth quarter, when the company added 7.7 million subscribers, Netflix again posted positive numbers, with revenue rising 4% from a year earlier to $8.1 billion and profit hitting $1.3 billion.
The company said its average paid memberships had increased 4% over last year and that it had added 1.75 million subscribers. Netflix said its subscriber base now totals 232.5 million around the world.
The results were a welcome relief to a company facing serious headwinds, including a possible writers’ strike, increased streaming competition and a burgeoning live business, which faltered over the weekend when technical difficulties delayed Netflix’s much-hyped “Love Is Blind” reunion show.
While revealing few details, Netflix said it was pleased with the performance of its new advertising tier, which offers monthly subscriptions for as little as $6.99, and that it had seen scant evidence that people were switching from its standard and premium plans down to its cheaper ad-supported plan.
The company also said its attempts to crack down on password-sharing in four markets — Portugal, Spain, New Zealand and Canada — was going well. In Canada, the company said, its paid membership base is now larger than before the crackdown, and revenue growth is now faster than in the United States.
The company intends to extend the crackdown more broadly, including to the United States, during the current quarter.
Netflix attributed the strong quarter to new seasons of shows like “Outer Banks,” “You” and “Ginny & Georgia” and the release of the sequel to the film “Murder Mystery” with Adam Sandler and Jennifer Aniston.