Netflix nights still come wrapped in red-and-white envelopes

SANTA CRUZ, CALIF. (AP) >> Netflix’s trailblazing DVD-by-mail rental service has been relegated as a relic in the age of video streaming, but there is still a steady — albeit shrinking — audience of diehards like Amanda Konkle who are happily paying to receive those discs in the iconic red-and-white envelopes.

“When you open your mailbox, it’s still something you actually want instead of just bills,” said Konkle, a resident of Savannah, Georgia, who has been subscribing to Netflix’s DVD-by-mail service since 2005.

It’s a small pleasure that Konkle and other still-dedicated DVD subscribers enjoy but it’s not clear for how much longer. Netflix declined to comment for this story but during a 2018 media event, co-founder and co-CEO of Netflix Reed Hastings suggested the DVD-by-mail service might close around 2023.

When — not if — it happens, Netflix will shut down a service that has shipped more than 5 billion discs across the U.S. since its inception nearly a quarter century ago. And it will echo the downfall of the thousands of Blockbuster video rental stores that closed because they couldn’t counter the threat posed by Netflix’s DVD-bymail alternative.

The eventual demise of its DVDby-mail service has been inevitable since Hastings decided to spin it off from a then-nascent video streaming service in 2011. Back then, Hastings floated the idea of renaming the service as Qwikster — a bungled idea that was so widely ridiculed that it was satirized on “Saturday Night Live.” It finally settled on its current, more prosaic handle, DVD.com. The operation is now based in non-descript office in Fremont, California, located about 20 miles from Netflix’s sleek campus in Los Gatos, California.

Shortly before breakup from video streaming, the DVD-by-mail service boasted more than 16 million subscribers, a number that has now dwindled to an estimated 1.5 million subscribers, all in the U.S., based on calculations drawn from Netflix’s limited disclosures of the service in its quarterly reports. Netflix’s video streaming service now boasts 223 million worldwide subscribers, including 74 million in the U.S. and Canada.

“The DVD-by-mail business has bequeathed the Netflix that everyone now knows and watches today,” Marc Randolph, Netflix’s original CEO, said during an interview at a coffee shop located across the street from the post office in Santa Cruz, California.

The 110-year-old post office has become a landmark in Silicon Valley history because it’s where Randolph mailed a Patsy Cline CD to Hastings in 1997 to test whether a disc could be delivered through the U.S. Postal Service without being damaged.

The disc arrived at Hastings’ home unblemished, prompting the duo in 1998 to launch a DVDby-mail rental website that they always knew would be supplanted by even more convenient technology.

“It was planned obsolescence, but our bet was that it would take longer for it to happen than most people thought at the time,” Randolph said.

With Netflix’s successful streaming service, it might be easy to assume that anyone still paying to receive DVDs through the mail is a technophobe or someone living in a remote part of the U.S. without reliable internet access. But subscribers say they stick with the service so they can rent movies that are otherwise difficult to find on streaming services.

For Michael Fusco, 35, that includes the 1986 film “Power” starring a then-youthful Richard Gere and Denzel Washington, and 1980’s “The Big Red One” starring Lee Marvin. That’s among the main reasons he has been subscribing to the DVD-by-service since 2006 when he was just a freshman in college, and he has no plans to cancel it now.

“I have been getting it for almost half my life, and it has been a big part,” Fusco said. “When I was young, it helped me discover voices I probably wouldn’t have heard. I still have memories of getting movies and having them blow my mind.”

Tabetha Neumann is among the subscribers who rediscovered the DVD service during the throes of the pandemic lockdowns in 2020 after running out of things to watch on her video streaming service. So she and her husband signed up again for the first time since canceling in 2011. Now they like it so much that they get the a plan that allows them to keep up to three discs at a time, an option that currently costs $20 per month (compared to $10 per month for the one-disc plan).