Netflix still makes money off DVDs

Wagner Moura plays Pablo Escobar in the popular Netflix series Narcos. Photo / supplied.
Wagner Moura plays Pablo Escobar in the popular Netflix series Narcos. Photo / supplied.

Netflix has become the dominant player in the world of video-on-demand streaming services, but it doesn't mean the company has forgotten its roots.

The tech giant has become a global media and entertainment power in the past few years, screening popular shows like Narcos.

But it still has a pretty lucrative side business. Astonishingly, Netflix continues to make money by lending DVDs to customers via the post.

The service is actually the origins of the company but surprisingly it's still going pretty strong in 2017. In fact, there remains 4.2 million people in the US who rent physical DVDs from Netflix.

Granted that number is down from its peak of 20 million in 2010, but Netflix isn't giving up on the DVD part of its business.

The streaming giant built its success by forging the future of home entertainment but it continues to keep the past relevant, and recently launched a new iOS app for users of its site, DVD.com.

Those who prefer the older technology don't get as much bang for their buck. Plans start at $US5 ($7) a month - half of what a monthly Netflix membership costs - and customers are able to be delivered a DVD bundle at a time.

It is only available to US customers but it's very interesting that Netflix hasn't killed off this part of its business yet, despite the fact that it's viewed by many as an unnecessary anachronism.

It's tough to tell how long Netflix's DVD.com service has left but in June 2015 the company told The New York Times that executives expect it to stick around.

"If you cut back on service, you are going to lose your subscriber base," Hank Breeggemann, general manager of Netflix's DVD division, said.

"Expect us to continue to ship DVDs for the foreseeable future."

To that end, Netflix has continued to find ways to streamline the service and look for innovative technologies that help trim costs as well as improve customer service.

The company boasts 86 million subscribers in 190 countries but even with an ever growing customer base, it doesn't want to lose those loyal to the disc.

- news.com.au

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