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Netflix closes its DVD rental business, marking the end of the red envelope era

Netflix will send its final red envelope on Friday, marking the end of 25 years of sending DVDs to members.

The company announced earlier this year that it was ending its DVD-by-mail service, 16 years after gradually shifting its focus to streaming content online. Netflix will continue to accept returns of customers’ remaining DVDs until October 27.

Introduced in 1998 during Netflix’s initial launch, the DVD service promised a simpler rental experience than having to go to the nearest Blockbuster or Hollywood Video. The red envelopes, which have long been synonymous with Netflix itself, littered homes and dorm rooms across the country.

Although the idea of ​​receiving a DVD in the mail may now seem almost as outdated as dial-up Internet access, some longtime customers told CNN they continue to find value in the DVD option .

DVD fans hold on

Colin McEvoy, a father of two from Bethlehem, Pa., and a self-described movie fanatic, said he has rushed through 40 movies in recent weeks to get through the rest of his queue. waiting before the end of the service. McEvoy stuck with Netflix’s DVD service so he could continue watching Bollywood and obscure independent films not often found on streaming services.

“I basically watched them as soon as I got them and then returned the discs as quickly as possible to get as many as possible,” said McEvoy, who has used Netflix’s DVD-by-mail service since 2001, just three years. years after its launch.

“I remember being in high school when I first signed up, and the concept was so new that I had to really convince my dad that it was a legitimate service and not a kind of an Internet scam,” said McEvoy, who uses an old Xbox 360 to play his Netflix DVDs. “Now I have friends who saw my Netflix red envelopes come in the mail, and they either didn’t remember what they were or couldn’t believe I still had the DVDs by the post office.”

Some other Netflix users support its DVD service not only for the selection but also for additional benefits. Brandon Cordy, a 41-year-old graphic designer from Atlanta, previously told CNN that he sticks to DVDs because many digital rentals don’t have special features or audio commentary.

There are other factors as well. Michael Inouye, an analyst at ABI Research, said some consumers may still lack access to reliable or fast enough broadband connections, or simply prefer physical media to digital, in the same way that some video enthusiasts do. audio still buy and collect CDs and records.

Why Netflix is ​​abandoning DVDs

For Netflix, however, the offering has made less sense in recent years. “Our goal has always been to provide the best service to our members, but as the DVD industry continues to decline, this is going to become increasingly difficult,” wrote co-CEO Ted Sarandos in a blog post in April.

Closing its DVD business could help Netflix better focus its resources as it expands into new markets such as gaming as well as live and interactive content. Its DVD business has also declined significantly in recent years. In 2021, Netflix’s non-streaming revenue – primarily attributable to DVD – represented 0.6% of its revenue, or just over $182 million.

The cost of operating its DVD business may also be a factor, especially as Netflix largely rethinks its spending amid increased streaming competition and broader economic uncertainty. “Moving plastic discs costs a lot more than moving digital bits,” said Eric Schmitt, principal managing analyst at Gartner Research. “Removal and replacement of damaged or lost inventory are also financial considerations.”

Even before Netflix announced the news, some longtime subscribers said they could see the writing on the wall.

“The inventory of titles available, while still vast, has shrunk over the years and some films that were once available are no longer available,” Cordy said. “The lead times to get one or more new films also started taking longer, so I knew it was only a matter of time. But I didn’t want it to end if I could. ‘help.”

Little hope for a DVD revival

Other DVD subscribers were hoping for a happy ending. Bill Rouhana, CEO of Chicken Soup for the Soul Entertainment — which owns DVD rental service Redbox — told The Hollywood Reporter in April that he hoped to buy Netflix’s DVD business. “I would like to buy it…I would like Netflix to sell this company to me instead of closing it down,” he said. Redbox remains popular despite streaming’s evolution, but has taken a hit during the pandemic due to a lack of new movies and TV shows to fill the slots.

A Netflix spokesperson told CNN that it has no plans to sell the DVD business and will recycle the majority of its DVDs through third-party companies that specialize in digital media recycling and electronic. It will also donate some of its inventory to film and media focused organizations.

Netflix is ​​also offering subscribers a “final surprise” where they can choose to receive up to 10 randomly selected DVDs from their queue.

McEvoy, who already subscribes to Disney+, Hulu, the Criterion Channel and Mubi, said he is now testing other services like Eros (Indian cinema) and Viki (Korean and Chinese films) for harder-to-find content. Still, he said, it’s “sad” to see Netflix’s DVD service go.

“There’s no way I could have found all of these movies (I watched) without Netflix’s DVD service,” he said.

The-CNN-Wire & 2023 Cable News Network, Inc., a Warner Bros. Company. Discovery. All rights reserved.


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