Netflix Inc. is shutting down its original business of delivering DVDs by mail, ending a 25-year-long service that revolutionized at-home TV viewing. The company will send out its final DVDs on September 29th as it shifts focus towards streaming services and diversifying its library with mobile games, live programming, and more local language content like Korean dramas.
The decision comes amid an anticipated decline in the company's share of U.S. subscription streaming revenue – from 49.1% in 2018 to an estimated 26.3% by the end of this year – as well as concerns among analysts and studios about a potential strike by unionized TV and film writers.
At its peak in 2010, approximately 20 million subscribers were signed up for Netflix's DVD-by-mail service which sent films and TV shows enclosed in easily recognizable red-and-white envelopes. However, over time the idea of waiting for entertainment via postal delivery became increasingly outdated compared to instant streaming services.
In response to changing consumer preferences, Netflix rebranded the rental service as DVD.com but ultimately decided on discontinuation due to dwindling demand for physical media rentals.
Co-CEO Ted Sarandos expressed gratitude towards customers who supported their DVD-by-mail venture: "We thank our loyal members who have been with us throughout this journey."
Since launching in 1998, Netflix has mailed out over five billion DVDs across the United States while also venturing into original programming through Red Envelope Entertainment titles such as "Sherrybaby" and "Zach Galifianakis Live at the Purple Onion."
As part of their ongoing shift toward digital platforms, Netflix continues expanding existing offerings like mobile gaming options alongside investing heavily in both English-language productions (such as hit series 'Stranger Things') or foreign-language content catering specifically to international audiences (exemplified by the global success of Korean drama 'Squid Game').
Industry expert Karen Thompson commented on Netflix's decision to end its DVD-by-mail service: "It's the end of an era, but it also signals a new beginning for Netflix as they continue innovating and adapting to their audience's needs in this increasingly digital world."
As streaming becomes the norm for consuming entertainment, more companies are expected to follow suit and transition away from traditional distribution methods. However, the impact of such changes on industry workers remains uncertain amidst concerns surrounding potential labor strikes.