Netflix’s DVD-by-mail service is finally coming to an end after 25 years of operation. The service, which played a pivotal role in obliterating Blockbuster video stores and paving the way for the streaming revolution, will shut down its remaining distribution centers in California, Texas, Georgia, and New Jersey. While the DVD service once boasted 16 million subscribers, it now has fewer than 1 million. Netflix made the decision in 2011 to separate its DVD side business from its streaming business, which now has 238 million subscribers and generates billions of dollars in revenue. The closure of the DVD service was inevitable given the stiff competition in the streaming market and the need for Netflix to cut expenses to boost profits.
Netflix’s DVD-by-mail service, which once had over 100,000 titles available, became popular due to its monthly subscription model that allowed customers to keep discs without late fees. The red-and-white envelopes that delivered the DVDs became a cultural phenomenon, and the service contributed to the downfall of Blockbuster. However, Netflix’s co-founders, Marc Randolph and Reed Hastings, always knew that DVDs would become obsolete with the advancement of technology and the rise of streaming. They named the service Netflix, anticipating the eventual transition to internet-based watching. Randolph considers the DVD service to be the booster rocket that propelled Netflix into orbit before being left behind after 25 years.
Overall, the closure of Netflix’s DVD-by-mail service marks the end of an era for the company. It was a groundbreaking concept that revolutionized the way people consumed movies and TV shows. However, with the rise of streaming and the need to remain competitive in the market, Netflix had to prioritize its streaming business and cut costs. While the DVD service brought in just $146 million in revenue last year, the streaming business generated billions. Despite the end of the DVD service, it is undeniable that it played a significant role in Netflix’s success and contributed to the transformation of the entertainment industry.