Netflix finally kills its DVD business

For many movie and TV junkies, ye olde discs and boxed sets still have their place - because they’re forever.

The enduring nature of Netflix’s DVD business was a minor wonder of the online age - or possibly a testament to how bad broadband is in parts of the US next to New Zealand.

The firm says its DVDs-by-mail business had revenues of US$200 million in 2020 and 2021 and US$100m in 2022 (a fair chunk of change in itself, but a diminishing sliver of Netflix’s total annual revenue, which was US$10.8 billion, US$12.1b and US$13.0b respectively over the period.

Today, Netflix - which launched as a DVD business before it went into streaming - said it was finally curtains for its disc business after 25 years, citing shrinking revenue. The final deliveries will be on September 29.

The model that Netflix pioneered - ordering rental DVDs online, which were then snail-mailed to your door - was aped by three players in NZ: startups Fatso and Movieshack, and the Sky TV-owned DVD Unlimited. Sky bought its two rivals, but then CEO John Fellet said the combined service still had less than 10,000 customers. It was closed in 2017.

Why we still need DVDs

In technology terms, DVDs (and Blu-Ray discs) have long been eclipsed by streaming.

But for many movie and TV junkies, ye olde discs and boxed sets still have their place - because they’re forever.

By contrast, third-party content on Netflix and other streaming services comes and goes due to what the industry calls “windowing” or time-limited licensing deals.

There are social media accounts devoted to alerting viewers to what movies or series are about to disappear from Netflix. DVDs on the shelf by your telly have a pleasing permanence.

News that Netflix was finally shuttering its DVD business came just a day after actor Mark Duplass announced that he and others were re-opening the once legendary “Vidiots” video rental store in LA. It will feature 50,000 DVD and Blu-ray titles and operate as a non-profit. Various Hollywood actors chipped in US$5000 donations to support the reopening.

Password sharing crackdown delayed

The shuttering of Netflix’s DVD business was over-shadowed in its quarterly result by a development involving its most recent initiative: The company delayed its password-sharing crackdown following a customer “cancel” backlash.

New Zealand was one of a handful of countries where the account-sharing crackdown was piloted. Earlier, columnist Peter Griffin complained that he was paying $25 per month for a Netflix Premium account that covered four screens - why couldn’t one of them be his father, living in a retirement village? Netflix said no. Griffin cancelled.

See a full report on its first-quarter numbers here.