Netflix is closing its DVD rental service, which originally launched in 1998 with its iconic red envelopes. Citing a decline in usage and a shift towards streaming services, The company stated that DVD customers will still receive the service until the closure date. The DVD service was once Netflix’s biggest money maker. Die-hard fans continue to subscribe because they treasure finding obscure movies that aren’t widely available on video streaming.
Why it matters: The move comes as Netflix shifts its focus to its streaming platform, which has seen significant growth in recent years. It marks the end of the DVD service as the company has decided to focus on more profitable avenues. The company plans to slowly taper off the DVD business and mail its final discs on Sept. 29.
- The DVD service generated $145.7 million in revenue last year, serving up to 1.3 million subscribers, based on the average prices paid by customers.
- Under the DVD service, Netflix has shipped more than 5 billion discs across the U.S. to date.
- The growth of Netflix’s video streaming service has been slowing down over the past year, prompting management to put more emphasis on boosting profits.
