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A12 BUSINESS
Friday 29 September 2023

Netflix’s DVD-by-mail service bows out

as its red-and-white envelopes make

their final trip

billion in revenue year.
The DVD service, in con-
trast, brought in just $146
million in revenue last year,
making its eventual closure
inevitable against a back-
drop of stiffening competi-
tion in video streaming that
has forced Netflix to whittle
expenses to boost its prof-
its.
“It is very bittersweet,” said
Marc Randolph, Netflix’s
CEO when the company
shipped its first DVD, “”Bee-
Netflix’s first CEO, Marc Randolph, poses outside the Santa tlejuice,” in April 1998.
Cruz, California, post office in May, 2022, where he had mailed “We knew this day was
a Patsy Cline CD to the company’s co-founder Reed Hastings, to coming, but the miracu-
test whether a disc could make it through the mail. lous thing is that it didn’t
Associated Press
come 15 years ago.”
Although he hasn’t been
By MICHAEL LIEDTKE ers,” a 1971 British horror involved in Netflix’s day-
AP Technology Writer film featuring Marlon Bran- to-day operations for 20
The curtain is finally com- do. “It’s makes me feel years, Randolph came up
ing down on Netflix’s nostalgic. Getting these with the idea for a DVD-
once-iconic DVD-by-mail DVDs has been part of my by-service in 1997 with his
service, a quarter century routine for decades.” friend and fellow entrepre-
after two Silicon Valley en- Some of the remaining neur, Reed Hastings, who
trepreneurs came up with DVD diehards will get up to eventually succeeded him
a concept that obliterated 10 discs as a going away as CEO a job Hastings held
Blockbuster video stores present to loyal customers until stepping aside earlier
while providing a spring- such as Konkle, 41, who this year.
board into video stream- has watched more than Back when Randolph and
ing that has transformed 900 titles since signing up Hastings were mulling the
entertainment. for the service in 2006. In concept, the DVD format
The DVD service that has hopes of being picked was such a nascent tech-
been steadily shrinking for the 10 DVD giveaway, nology that there were
in the shadow of Netflix’s Konkle set up her queue to only about 300 titles avail-
video streaming service highlight for more movies able at the time.
will shut down after its five starring Brando and older In 1997, DVDs were so hard
remaining distribution cen- films that are difficult to find to find that when they de-
ters in California, Texas, on streaming. cided to test whether a
Georgia and New Jersey At its peak, the DVD boast- disc could make it thor-
mail out their final discs Fri- ed 16 million subscribers ough the U.S. Postal Ser-
day. who could choose from vice that Randolph wound
The fewer than 1 million re- more than 100,000 titles up slipping a CD contain-
cipients who still subscribe stocked in the Netflix li- ing Patsy Cline’s greatest
to the DVD service will be brary. hits into a pink envelope
able to keep the final discs But in 2011, Netflix made and dropping it in the mail
that land in their mailboxes. the pivotal decision to sep- to Hastings from the Santa
“It’s sad,” longtime Netflix arate the DVD side busi- Cruz, California post office.
DVD subscriber Amanda ness from a streaming busi- Randolph paid just 32
Konkle said Thursday as she ness that now boasts 238 cents for the stamp to mail
waited the arrival for her million worldwide subscrib- that CD, less than half the
final disc, “The Nightcom- ers and generated $31.5 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 mod-
el that allowed customers
to keep discs for as long as
they wanted without fac-
ing the late fees that Block-
buster imposed for tardy
returns.q