Netflix’s shrinking DVD service faces uncertain future

SAN FRANCISCO — Originally cast in a starring role, Netflix’s original DVD-by-mail service has been reduced to a bit player — one that may eventually get killed off as the company focuses on its booming video streaming service.

Netflix’s fourth-quarter earnings report released Wednesday provided the latest glimpse at the DVD service’s descent into oblivion as the streaming service hogs the spotlight.

The DVD service shed 159,000 subscribers during the final three months of last year to end December with 4.1 million customers. That’s an 11-year low for a format that gave Netflix its initial shot at stardom, allowing it out-innovate and outmaneuver Blockbuster Video, then the king of home-video rentals.

Now, though, the DVD service operates mostly as an afterthought that caters to a shrinking audience of die-hards who prefer to watch movies and TV shows on discs instead of streaming or downloading them onto a mobile gadget.

Streaming gets top billing

Meanwhile, Netflix’s streaming service has been reshaping the world of entertainment, attracting converts to the convenience of streaming video at any time on any device with a high-speed internet connection.

The streaming service now boasts nearly 94 million subscribers in 190 countries, after adding another 1.9 million in the U.S. and 5.1 million in its overseas markets during the final three months of last year. RBC Capital Markets analyst Mark Mahaney predicts Netflix will have 160 million streaming subscribers by 2020.