Netflix is ending its original business of delivering DVDs by mail after 25 years, it announced Tuesday, following a steady decline in demand as the company—which was first created to compete with brick-and-mortar DVD rental shops—focuses on digital streaming.
DVD.com launched in 1998.
Getty Images
Key Facts
CEO Ted Sarandos said in a statement Tuesday that DVD.com will close on September 29, after the company decided to end its DVD delivery service because demand for physical rentals “continues to shrink.”
Netflix shipped more than 5.2 billion DVDs in its well-known red envelopes since 1998, according to the company, and recorded 40 million unique subscribers.
The DVD service had an estimated 1.5 million subscribers as of November, according to the Associated Press, a tiny fraction of the 232.5 million paid streaming subscribers reported by Netflix in the first quarter of this year.
Surprising Fact
The first movie delivered by Netflix was Beetlejuice on March 10, 1998, while its most-popular title was The Blind Side.
Tangent
Netflix announced plans to shutter its DVD service ahead of its first-quarter earnings report, which noted its streaming service added 1.75 million subscribers in the first three months of 2023—its third consecutive quarter of increases after losing subscribers in the first half of 2022.
More on Netflix
Big Number
$1.31 billion. That’s how much Netflix reported in first-quarter earnings this year, slightly exceeding the $1.3 billion projected by analysts. The company logged $8.16 billion in revenue, falling just below an expected $8.18 billion.
Key Background
Netflix, founded by Reed Hastings and Marc Randolph, launched in 1998 as a DVD rental and sales site. The company released a subscription service the following year, allowing subscribers to request DVDs by mail without due dates or late fees. Netflix then created its streaming service in 2007, with a subscription service that was combined with DVD delivery. The company split the two services in 2011, following the collapse of popular video retailer Blockbuster. DVD.com has maintained a steady stream of subscribers despite a shift toward streaming services, though it represented just 0.5% of Netflix’s total revenue in 2022.
This story was first published on forbes.com and all figures are in USD.
