Netflix co-CEO Reed Hastings in a pile of DVDs.
AP
Netflix celebrated its 25th anniversary this week, and it still has a DVD business.
Movie buffs who can’t find obscure movies online seem to be attracted to the offering.
But the DVD segment might only have a couple years left.
Netflix was founded 25 years ago this week and launched its DVD-by-mail service soon after. It’s easy to forget that’s how it started.
The company has since ballooned into a streaming giant, having ushered in the era of binge watching, with over 220 million subscribers worldwide paying for its online streaming service.
But a quarter century later, Netflix still has the DVD segment, and it still sends physical discs by mail out to customers in the US who have a separate subscription just for that.
“I keep Netflix DVD not only to watch weird movies, but things I research and watch before I buy,” William FitzGerald, a visual artist, told Insider.
He has 140 movies in his queue.
Netflix’s subscription model for DVDs (and blu-rays) has three plans: the basic $10-a-month plan gets you one disc at a time, the $15 plan gets you two, and the $20 plan gets you three.
When you send those back in the envelope they came in, you get the next ones in your queue. Each plan comes with free shipping and returns.
On online forums, some loyalists say they subscribe because they can find obscure movies that aren’t readily online. It seems to attract the biggest film buffs, or those in rural areas without access to fast internet.
Netflix has a vast library on its streaming service, but last month its number of originals actually surpassed its amount of licensed content. For those looking for classic movies or TV shows that aren’t available in a streamers’ back catalog, renting DVDs is the best option.
“So much good stuff isn’t streaming anywhere, or is streaming at prohibitive prices,” said one person last year, under a Reddit thread titled “I subscribed to Netflix’s DVD service for the first time ever last month!”
“I didn’t know they still did that,” responded another Reddit user. “Might not be a bad idea since I live in a rural area with bad internet.”
But Netflix’s DVD business might have a questionable future.
DVD.Netflix.com is where to sign up for Netflix’s DVD subscription.
Netflix
Netflix’s DVD offering might only have a couple years left
By 2018, its distribution centers throughout the US had shrunk to 17, down from the 50 Netflix was operating at its peak.
“The speed has definitely slowed down,” said one Reddit user earlier this year. “Netflix used to have MANY distribution centers around the country. Now, they have a handful. Discs would take one day to return, and another day to get a new one. Now, it seems it’s two days each way.”
But the person added, “if you watch a lot of stuff, you can balance it out by having a 3-disc program and have them traveling back and forth, criss-crossing in the mail.”
By the end of 2019, the last time the company reported DVD subscriber numbers, it had 2.15 million members — a loss of over 500,000 in the year, and down dramatically from the more than 3 million it had in 2017.
And since then, revenue for the segment has dropped each year. It brought in $182 million in 2021 — a far cry from the $30 billion in streaming revenue in that time, and from the nearly $300 million in DVD revenue two years prior.
Netflix co-CEO Reed Hastings said in 2019 that he could see the DVD segment lasting another five years, which would mean through 2024. Though he also added that he’s in no hurry to get rid of it.
Netflix did not respond to a request for comment for this story.
If Netflix were to scrap the DVD offering, FitzGerald has an alternative in mind for his obscure movie needs.
“I should just get a Criterion Channel subscription one of these days,” he said.
But he also hopes that 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.”