Netflix's DVD-by-mail service bows out as its red-and-white envelopes make their final trip (2024)

The curtain is finally coming down on Netflix’s once-iconic DVD-by-mail service, a quarter century after two Silicon Valley entrepreneurs came up with a concept that obliterated Blockbuster video stores while providing a springboard into video streaming that has transformed entertainment.

The DVD service that has been steadily shrinking in the shadow of Netflix’s video streaming service will shut down after its five remaining distribution centers in California, Texas, Georgia and New Jersey mail out their final discs Friday.

The fewer than 1 million recipients who still subscribe to the DVD service will be able to keep the final discs that land in their mailboxes.

“It’s sad,” longtime Netflix DVD subscriber Amanda Konkle said Thursday as she waited the arrival for her final disc, “The Nightcomers,” a 1971 British horror film featuring Marlon Brando. “It’s makes me feel nostalgic. Getting these DVDs has been part of my routine for decades.”

Some of the remaining DVD diehards will get up to 10 discs as a going away present to loyal customers such as Konkle, 41, who has watched more than 900 titles since signing up for the service in 2006. In hopes of being picked for the 10 DVD giveaway, Konkle set up her queue to highlight for more movies starring Brando and older films that are difficult to find on streaming.

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At its peak, the DVD boasted more than 20 million subscribers who could choose from more than 100,000 titles stocked in the Netflix library. But in 2011, Netflix made the pivotal decision to separate the DVD side business from a streaming business that now boasts 238 million worldwide subscribers and generated $31.5 billion in revenue year.

The DVD service, in contrast, brought in just $146 million in revenue last year, making its eventual closure inevitable against a backdrop of stiffening competition in video streaming that has forced Netflix to whittle expenses to boost its profits.

“It is very bittersweet,” said Marc Randolph, Netflix’s CEO when the company shipped its first DVD, “Beetlejuice,” in April 1998. “We knew this day was coming, but the miraculous thing is that it didn’t come 15 years ago.”

Although he hasn’t been involved in Netflix’s day-to-day operations for 20 years, Randolph came up with the idea for a DVD-by-service in 1997 with his friend and fellow entrepreneur, Reed Hastings, who eventually succeeded him as CEO — a job Hastings held until stepping aside earlier this year.

Back when Randolph and Hastings were mulling the concept, the DVD format was such a nascent technology that there were only about 300 titles available at the time.

In 1997, DVDs were so hard to find that when they decided to test whether a disc could make it thorough the U.S. Postal Service that Randolph wound up slipping a CD containing Patsy Cline’s greatest hits into a pink envelope and dropping it in the mail to Hastings from the Santa Cruz, California, post office.

Randolph paid just 32 cents for the stamp to mail that CD, less than half the current cost of 66 cents for a first-class stamp.

Netflix quickly built a base of loyal movie fans while relying on a then-novel monthly subscription model that allowed customers to keep discs for as long as they wanted without facing the late fees that Blockbuster imposed for tardy returns. Renting DVDs through the mail became so popular that Netflix once ranked as the U.S. Postal Service’s fifth largest customer while mailing millions of discs each week from nearly 60 U.S. distribution centers at its peak.

Along the way, the red-and-white envelopes that delivered the DVDs to subscribers’ homes became an eagerly anticipated piece of mail that turned enjoying a “Netflix night” into a cultural phenomenon. The DVD service also spelled the end of Blockbuster, which went bankrupt in 2010 after its management turned down an opportunity to buy Netflix instead of trying to compete against it.

Even as video streaming boomed, movie lovers like Michael Fusco stuck with the DVD service because it still offered films that were no longer shown in theaters and couldn’t easily be found in stores. When Netflix announced its intention to close the DVD service five months ago, Fusco expanded his subscription plan so he could rent as many as eight discs at a time at a cost of $56 a month.

Fusco, 36, got his money’s worth, especially in August when he watched 32 DVDs sent to him by Netflix.

“I was very strategic,” said Fusco, who also thought carefully about what films to pick as his final selections after watching more than 2,400 titles during his 18 years as subscriber. The Southern California resident is now awaiting a Spanish comedy, “Solo Con Tu Pareja,” as his final disc and also set up his queue to highlight films by Harrison Ford (“Mosquito Coast”), Tom Hanks (“Joe Versus The Volcano”) and Arnold Schwarzenegger (“Twins”) should he be among those picked for the final 10-disc giveaway.

Randolph and Hastings always planned on video streaming rendering the DVD-by-mail service obsolescent once technology advanced to the point that watching movies and TV shows through internet connections became viable. That expectation is one of the reasons they settled on Netflix as the service’s name instead of other monikers that were considered, such as CinemaCenter, Fastforward, NowShowing and DirectPix (the DVD service was dubbed “Kibble,” during a six-month testing period)

“From Day One, we knew that DVDs would go away, that this was transitory step,” Randolph said. “And the DVD service did that job miraculously well. It was like an unsung booster rocket that got Netflix into orbit and then dropped back to earth after 25 years. That’s pretty impressive.”

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This story has been corrected to reflect that Netflix’s DVD service had more than 20 million subscribers at its peak, not 16 million.

Netflix's DVD-by-mail service bows out as its red-and-white envelopes make their final trip (2024)

FAQs

Netflix's DVD-by-mail service bows out as its red-and-white envelopes make their final trip? ›

At its peak, the DVD service had over 20 million subscribers, but it brought in just $146 million in revenue last year. The closure comes as Netflix focuses on its streaming business, which has 238 million worldwide subscribers and generated $31.5 billion in revenue last year.

What happened to Netflix DVD-by-mail? ›

Netflix has mailed out its last red DVD envelope. The streaming giant on Friday published a blog post commemorating its legacy DVD-by-mail business, which will end its operations today. “In 1998, we delivered our first DVD. This morning, we shipped our last,” the blog post begins.

When did Netflix stop mailing movies? ›

Before Netflix became the streaming giant people recognize it as today, it shipped rental DVDs to customers, a practice that continued into 2023. Over the years, the service has had 40 million unique subscribers and has shipped more than 5 billion DVDs, according to the company.

Did Netflix used to ship DVDs? ›

Most of Netflix's 238 million streaming customers around the world will be unaware that the company first launched 25 years ago as a DVD mailing service. Even fewer might realise that operation has continued, with under 1 million people still subscribing.

How has Netflix used the long tail in the DVD-by-mail? ›

Netflix has used the long tail in the DVD-by-mail business to its advantage, crafting a business model that creates close ties with film studios. What do film studios stand to gain from taking advantage of the Netflix model targeted at increasing the firm's long-tail offerings?

Will Netflix charge for unreturned DVDs? ›

DVD member questions

You won't be charged for any unreturned discs and can enjoy them for as long as you like.

Does anyone still use Netflix DVD? ›

It's the end of an era—and not just for plastic discs.

In April, a little more than 25 years after Netflix shipped its first DVD, co-CEO Ted Sarandos announced that the company would be shutting down its disc-mailing business for good at the end of September.

What is Netflix going to do with all the DVDs? ›

A Netflix spokesperson told CNN it has no plans to sell the DVD business and will be recycling the majority of its DVDs through third-party companies that specialize in recycling digital and electronic media. It will also donate some of its inventory to organizations focused on film and media.

What was Netflix's original name? ›

Netflix, originally known as Kibble, was founded by former marketing director Marc Randolph and computer scientist and mathematician Reed Hastings back in the year 1997, making the company technically older than Google itself.

What will replace Netflix DVDs? ›

2023 Top DVD Rental Services Alternative to Netflix
Whre to Rent DVDs like NetflixPriceMaximum Rental Period
Redbox$1.80 per night for DVDs, $2.00 for Blu-ray.7 days
3D-BlurayRentalStarting from $8.99/1 month for 2 DVDs.As long as you want.
GameflyStarting from $8.95 one movie per month (no 4k).As long as you want.
6 more rows
Oct 25, 2023

Can I keep my Netflix DVD? ›

As a parting gift to its loyal DVD-by-mail members, Netflix will let them keep any discs they still have out. The company, which launched as a DVD subscription service 25 years ago, announced this spring that it would wind down the business — which, superseded by streaming, has been dwindling for years.

Is Netflix sending out free DVDs? ›

As Netflix gets ready to mark the end of an era, it is sending customers some parting gifts. The company said it will ship subscribers to its DVD plan as many as 10 discs (taken from their queues) before the division halts operations on September 29.

Did anyone get extra Netflix DVDs? ›

The company announced that a few lucky subscribers will get a haul of DVDs but still may have to return those copies of "Spy Kids" and "The Fast and the Furious: Tokyo Drift." The famous Netflix red envelopes are being sent out one final time next month, and a few diehard subscribers will get a haul of DVDs.

Did you have to return Netflix DVDs? ›

As a parting gift to its loyal DVD-by-mail members, Netflix will let them keep any discs they still have out. The company, which launched as a DVD subscription service 25 years ago, announced this spring that it would wind down the business — which, superseded by streaming, has been dwindling for years.

Can I buy Netflix movies on DVD? ›

In April, Netflix said it would shutter its DVD service at the end of September after more than 25 years, citing a continually shrinking market. It shipped its first DVD in March 1998, at a time when Blockbuster dominated the movie rental business and most internet connections were of the dial-up variety.

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