Netflix to close DVD service that launched the entertainment giant 25 years ago
Netflix is winding down the DVD rental rental service that launched the company in 1998, the company has announced.
Writing in a blog post, Netflix co-CEO Ted Sarandos said: ‘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.’
The last discs will be posted on September 29.
In 2019 DVD Netflix had 2.1million subscribers, but it was reported that, by the end of 2022, revenue had dropped 50% to $100billion.
‘Those iconic red envelopes changed the way people watched shows and movies at home – and they paved the way for the shift to streaming,’ said Mr Sarandos, adding that the DVD service had entered its ‘final season’.
Netflix co-founder Marc Randolph described in his autobiography how he and co-founder Reed Hastings had flirted with the idea of challenging Blockbuster Video with mail-order VHS cassettes, but it would have cost too much. They instead landed on a more cost-effective proposition: DVDs sold and rented online.
It was a calculated risk that the nascent DVD player, which went on sale for the first time in the US in 1997, would catch on with the consumer. The service launched with fewer than 1,000 titles, according to Randolph’s account.
DVD Netflix
Launched 1998
First DVD rented Beetlejuice
Number of DVDs posted 5.2bn+
Most popular title The Blind Side
‘Betting on DVDs was a risk,’ Randolph wrote in his book, That Will Never Work: The Birth Of Netflix And The Amazing Life Of An Idea. He added: ‘But it might also be our way to finally crack that category.’
It was the first time Netflix’s gamble on an emerging technology allowed it to challenge an entrenched competitor. Rival Blockbuster filed for bankruptcy in 2010 – having passed on the opportunity to buy Netflix in 2000. Now only on store remains, in Bend, Oregon.
‘From the beginning, our members loved the choice and control that direct-to-consumer entertainment offered,’ said Sarandos. ‘We feel so privileged to have been able to share movie nights with our DVD members for so long, so proud of what our employees achieved and excited to continue pleasing entertainment fans for many more decades to come.’
When Netflix attempted to split its DVD rental business from online streaming into a separate service called Qwikster in 2011, it provoked outrage from consumers. The plan was ultimately scrapped.
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