The business that got Netflix off the ground — and put Blockbuster in the ground — sending DVDs through the mail in red envelopes, is going to be no more as of this September.
Netflix announced Tuesday that it will be mailing its final DVDs to subscribers on September 29.
"Our goal has always been to provide the best service for our members but as the business continues to shrink that’s going to become increasingly difficult," writes Netflix Co-CEO Ted Sarandos in a blog post, framing the shutdown of the mail service as "go[ing] out on a high."
"Those iconic red envelopes changed the way people watched shows and movies at home — and they paved the way for the shift to streaming," Sarandos adds.
Die-hard fans of the service will no doubt be lamenting the loss of Netflix's broad catalog of films on disc — which is far broader than what one can typically find streaming on demand, although Amazon Prime is doing a pretty good job of providing access, for a fee, to a range of older and foreign films.
And, as the Associated Press reports, Netflix has been slowly shrinking its DVD selection and shutting down warehouses for a while, leading to longer wait-times for customers in receiving their discs.
The idea for Netflix came to co-founder Marc Randolph back in 1997, when he reportedly sent a Patsy Cline CD to friend and co-founder Reed Hastings to see if it could get through the US mail undamaged. It arrived just fine, and the two decided that even if DVD technology was bound to be obsolete at some point, it might take just long enough to build a viable business. And it did.
Per the AP, Netflix's revenue from the DVD-by-mail service, which more recently was rebranded as DVD.com, was $145.7 million last year, which translates to around 1.1 to 1.3 million subscribers. At its peak more than a decade ago, around 2011, Netflix had around 16 million subscribers to the mail service.
These days, the company boasts 232.5 million worldwide streaming subscribers, so it seems like the company believes its money would be better spent elsewhere, and maybe renting all that DVD warehouse space isn't providing enough of a return anymore. Also, it means letting go of staff and an extra office — as the AP notes, the "DVD service has been operating from a non-descript office in Fremont, California."
Does this mean there's a massive DVD clearance sale in the making?