In a Jan. 29 filing with the U.S. Securities and Exchange Commission, Netflix said it will start limiting disclosure on the domestic DVD business as it shifts to a single operating segment. It specifically mentioned no longer reporting contribution profit or loss for the domestic DVD business as well as the domestic streaming and international streaming businesses. (See article by Media Play News.)
It is unclear whether Netflix will continue to report the number of DVD subscribers it has. Netflix did not respond to a request for comment on the subject.
Now that Netflix is the leading subscription video-on-demand service, it has little incentive to promote the old-school DVD business which gave the company its start.
Without marketing and promotion, the number of Netflix DVD subscribers has withered in recent years.
Last year, the DVD business lost 553,000 subscribers, or 20% of its total in just 12 months.
At its current rate, the Netflix DVD business will drop below 2 million subscribers in the second quarter.
Given the decline of the DVD business, one must wonder how long Netflix will continue to operate it.
The key to that question is whether the business is profitable. As of 2019, it was.
The domestic DVD-by-mail business generated a profit of $174 million on revenue of $297 million last year. That’s small potatoes compared to the company’s global streaming service. The company’s total revenue ion 2019 was $20.16 billion.
The eventual end of the Netflix DVD business will be harder to predict now, given that the company will no longer provide contribution profit details from the segment.
Photo: Netflix DVD service (Netflix)
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