Netflix DVDs: ‘We’re in the endgame now’

As I predicted in February, Netflix stopped giving subscriber numbers for its legacy DVD-by-mail service starting with its first-quarter report released on April 21.
The U.S.-only DVD service ended the fourth quarter of 2019 with 2.15 million paid subscriptions. In the December quarter, the unit generated a profit of $31.1 million on revenue of revenue of $68.5 million.
In the first quarter of 2020, Netflix’s DVD.com subsidiary generated revenue of $64.3 million, down 20% year over year, according to filings with the U.S. Securities and Exchange Commission. That’s the only statistic it gave on the DVD business for the most recent quarter.
Of course, the DVD unit is a drop in the bucket compared with Netflix’s global subscription streaming video service, which generated $5.7 billion in sales last quarter.
Netflix doesn’t promote its legacy DVD business so it’s no wonder why it is fading away.
The business is so different from its streaming video service I wonder why Netflix doesn’t sell the unit while it still has some value to potential buyers.
I can only imagine that Netflix doesn’t want to compete with the service if some buyer manages to return the business to growth. I can see potential buyers including Amazon.com and Redbox, now owned by private equity firm Apollo Global Management.
Another reason Netflix doesn’t divest the unit is because it’s likely still attracting streaming subscribers from the DVD service. It’s also likely that certain software assets are shared between the DVD unit and the streaming service.
Maybe some investor will ask Netflix what it plans to do with the DVD-by-mail service at its virtual annual shareholder meeting on June 4.
If Netflix’s DVD business goes away, so will access to many older movies, including classics and rare films. Those that are available for streaming will be split across a variety of separate online video services.
Netflix has shifted its streaming business away from licensed content and more towards new original content that it owns.
It would be a shame to see Netflix just let the service die. Especially when studios are still releasing movies and TV series on DVD and Blu-ray Disc.
But the end of physical media is inevitable. To quote Dr. Strange in “Avengers: Infinity War”: “We’re in the endgame now.”

Related articles:

The perfect virtual video store isn’t Netflix. It’s DVD.com. (Vox; April 23, 2020)

In Defense of the Disc: DVD, Blu-ray Disc Collectors Speak Out (Media Play News; Feb. 24, 2020)

4K Disc Players Conspicuous By Their Absence From CES (HD Guru; Jan. 20, 2020)