Netflix’s DVD-by-mail business still has die-hard fans — but its days are numbered

Netflix’s groundbreaking DVD-by-mail rental service has been dismissed as a relic in the age of video streaming, but there’s still a steady — albeit dwindling — diehard viewer like Amanda Konkler, who’s happy to pay to receive these iconic titles. Red disc – and white envelope.

“When you open the mailbox, it’s still something you actually want, not just a bill,” said Conker, a Savannah, Ga., resident who has subscribed to Netflix’s DVD-by-mail service since 2005.

It’s a small pleasure for Konkle and other still-focused DVD subscribers, but it’s not clear how long it will last. Netflix declined to comment for this story, but at a media event in 2018, Netflix co-founder and co-CEO Reed Hastings said the DVD mail-in service would likely shut down around 2023.

When — not if — it happens, Netflix will shut down a service that has shipped more than 5 billion discs in the U.S. since its founding nearly a quarter-century ago. That would echo the closure of thousands of Blockbuster video rental stores, which have closed because they couldn’t cope with the threat posed by Netflix’s DVD-by-mail alternative.

The eventual demise of its DVD-by-mail service was inevitable, as Hastings decided in 2011 to spin it off from its fledgling video streaming service. At the time, Hastings floated the idea of ​​renaming the service Qwikster—a botched idea so widely ridiculed that it was satirized on “Saturday Night Live.” It eventually settled on the current more prosaic name DVD.com. The business is now based in a nondescript office in Fremont, Calif., about 20 miles from Netflix’s hip Los Gatos, Calif., campus.

Shortly before breaking up with video streaming, the DVD mail-in service had more than 16 million subscribers, a number that has now dwindled to about 1.5 million subscribers, all in the U.S., according to calculations Netflix made of its limited disclosures about the service in its quarterly report. Netflix’s video streaming service currently has 223 million subscribers worldwide, including 74 million in the US and Canada.

“The mail-in DVD business left behind the Netflix that everyone knows and watches,” former Netflix CEO Mark Randolph said in an interview at a coffee shop across the street from the Santa Cruz, Calif., post office.

The 110-year-old post office has become a milestone in Silicon Valley history, as it was here in 1997 that Randolph mailed a Patsy Cline CD to Hastings to test whether a CD could be delivered by the US Postal Service without damage.

The disc arrived at Hastings’ home intact, prompting the pair to launch a DVD-by-mail rental site in 1998, always knowing it would be replaced by more convenient technology.

“It was a planned phase-out, but we bet it would take longer than most people thought at the time,” Randolph said.

With Netflix’s successful streaming service, it might be tempting to assume that the people who still pay to receive DVDs by mail are technophobes or those living in remote parts of the US without reliable internet access. But subscribers say they stick with the service so they can rent movies that are hard to find on streaming services.

For Michael Fusco, 35, that included 1986’s “Thrones,” starring a then-young Richard Gere and Denzel Washington, and 1980’s “Red Man,” starring Lee Marvin. “. It’s one of the main reasons he started subscribing to DVD-by-service in 2006, when he was a college freshman, and he has no plans to cancel it now.

“I’ve had it for almost half my life, and it’s been a big part of it,” Fusco said. “When I was younger, it helped me discover sounds that I might not have heard. They took me by surprise.”

Tabetha Neumann is one of the subscribers who rediscovered the DVD service during the throes of the 2020 pandemic lockdown as there was nothing left to watch on her video streaming service. So she and her husband signed again for the first time since canceling in 2011. Now they like it so much that they get a plan that allows them to keep up to three discs at once, an option that currently costs $20 per month (compared to $10 per month for the single-disc plan).

“When we started going through all the movies we wanted to watch, we realized it was cheaper than paying $5 per movie on some streaming services,” Neumann said. “Also, we found a lot of old-fashioned horror films, and the genre doesn’t get a lot of streaming.”

Konkle, who wrote a book about the films of Marilyn Monroe, says she can still find films on DVD services — like the 1954 film “The Cow Queen of Montana,” featuring future U.S. presidents Ronald Reagan and Barbara Stanwyck—and the 1983 French film “Cane Alley”—helped her teach a film studies class as an associate professor at Georgia Southern University. It’s a viewing habit she doesn’t usually share in class because “Most of my students don’t know what a DVD is,” laughs Konkle, 40.

But for all the DVD service’s allure, subscribers are starting to notice signs of deterioration, as the business has shrunk from more than $1 billion in annual revenue a year ago to perhaps less than $200 this year.

Subscriber Katie Cardinale, who lives in Hopedale, Mass., said she now has to wait two to four days longer than in the past to receive the disc because it arrives from New Jersey instead of Boston. Shipped from distribution center. (Netflix doesn’t say how many DVD distribution centers are still in operation, but there used to be about 50 of them in the US).

Konkle said more discs are now cracked or otherwise defective, and it will take “forever” to replace them. Almost all subscribers have noticed that the selection of DVD titles has dwindled considerably since the service’s peak days, when Netflix boasted more than 100,000 different movies and TV shows on disc.

Netflix no longer discloses the size of its DVD library, but subscribers interviewed by The Associated Press all said the shrinking selection has made it harder to find famous movies and popular series that were once often available on the service. Instead, Netflix is ​​now sorting requests for titles such as the first season of the award-winning “Ted Lasso” series (purchasable on DVD) into the “Saved” queue, suggesting it may decide to store it in the future , as required.

Knowing that the end is near, Randolph said he will lament the death of the DVD service he brought, while reassuring that its legacy will live on.

“Netflix’s DVD business is an important part of Netflix’s past and present,” he said. “It’s baked into the DNA of the company.”

–Associated Press