HomeNetflixNetflix still has a DVD business 25 years later. That’s the way it is
Netflix still has a DVD business 25 years later. That’s the way it is
September 4, 2022
Netflix celebrated its 25th anniversary this week and it still has a DVD business.
Movie buffs who can’t find obscure movies online seem drawn to what’s on offer.
But the DVD segment may only have a few more years to go.
Netflix was founded 25 years ago this week and launched its DVD-by-mail service soon after. It’s easy to forget that this is how it started.
Since then, the company has grown into a streaming giant, ushering in the binge-watching era, with over 220 million subscribers worldwide paying for its online streaming service.
But a quarter-century later, Netflix still has the DVD segment and still mails physical discs to US customers who have a separate subscription just for that.
“I keep Netflix DVDs not only to watch weird movies, but also to research and watch things before I buy them,” William FitzGerald, a visual artist, told Insider.
He has 140 films in his queue.
Netflix’s subscription model for DVDs (and Blu-rays) has three plans: the $10-a-month basic plan gets you one disc at a time, the $15 plan gets you two, and the $20 plan gets you two get three.
If you return these in the envelope they arrived in, you will receive the next in your queue. Every plan comes with free shipping and returns.
On online forums, some loyalists say they sign up because they can find obscure movies that aren’t readily available online. It seems to attract the biggest movie fans or those in rural areas without access to fast internet.
Netflix has a massive library on its streaming service, but in the last month the number of originals has actually outpaced the amount of licensed content. For those looking for classic movies or TV shows that aren’t available in a streamer’s back catalog, renting DVDs is the best option.
“So much good stuff isn’t streamed anywhere, or streamed at prohibitive prices,” one person said last year under a Reddit thread titled “I subscribed to Netflix’s DVD service for the first time last month!”
“I didn’t know they still do this,” replied another Reddit user. “Couldn’t be a bad idea as I live in a rural area with bad internet.”
But Netflix’s DVD business could have a questionable future.
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Netflix’s DVD offering may only have a few more years to go
By 2018, its U.S. distribution centers had dwindled to 17, down from the 50 Netflix operated at its peak.
“Speed has definitely slowed down,” said one Reddit user earlier this year. “Netflix used to have LOTS of distribution centers across the country. Now they have a handful. It took a day to get the discs returned and another day to get a new one. Now it seems like two days each way.”
But the person added, “If you’re looking at a lot of stuff, you can balance it out by having a 3-disc program and letting them travel back and forth, criss-cross in the mail.”
At the end of 2019, when the company last reported DVD subscriptions, it had 2.15 million members — a loss of over 500,000 for the year and a dramatic drop from more than 3 million in 2017.
And since then, the segment’s sales have fallen every year. It grossed $182 million in 2021 — a far cry from the $30 billion in streaming earnings during that time and the nearly $300 million in DVD earnings two years earlier.
Netflix co-CEO Reed Hastings said in 2019 that he could extend the DVD segment for five more years, which would mean until 2024. However, he added that he was in no hurry to get rid of it.
Netflix did not respond to a request for comment on this story.
Should Netflix drop DVD offerings, FitzGerald has an alternative in mind for his obscure movie needs.
“I should just get a subscription to the Criterion Channel someday,” he said.
But he also hopes physical media will always have a place in the entertainment landscape: “Hopefully we never fully give in to the cloud for all our media needs.”