CNN
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When Colin McEvoy, a father of two from Bethlehem, Pennsylvania and a self-described film fanatic, wants to watch a Bollywood film or an obscure independent movie, he often turns to Netflix – but not its popular streaming service.
McEvoy, 39, said he’s been using Netflix’s DVD-by-mail service since 2001, just three years after it launched.
“I remember I was in high school when I first signed up for it, and the concept was so novel, I had to really convince my dad that it was a legit service and not some sort of Internet scam,” said McEvoy, who uses an old Xbox 360 to play his Netflix DVDs. “Now I have friends who’ve seen my red Netflix envelopes arrive in the mail, and either didn’t remember what they were or couldn’t believe that I still got the DVDs in the mail.”
Now, McEvoy is one of the DVD-by-mail holdouts mourning the service’s imminent demise. On Tuesday, Netflix announced it will send out its final red envelope on September 29, 2023. marking an end to 25 years of mailing DVDs to members. The company will continue to accept returns of customers’ remaining DVDs until October 27.
“I’ll be sad to see the service go,” McEvoy said.
Introduced in 1998 when Netflix first launched, the service promised an easier rental experience than having to drive 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. But in 2007, Netflix began streaming content online, and gradually shifted the focus away from its original DVD business.
Today, the idea of receiving a DVD in the mail may sound almost as outdated as receiving a dial up CD, but some longtime customers told CNN they continued to find value in the DVD option, including for its selection, pricing and added perks.
Brandon Cordy, a 41-year-old graphic designer from Atlanta, said he stuck with DVDs because many digital rentals don’t come with special features or audio commentaries.
There are other factors, too. Michael Inouye, an analyst at ABI Research, said some consumers may still not have access to reliable or fast enough broadband connections, or simply prefer physical media to digital, much in the way that some audio enthusiasts still purchase and collect CDs and records. Other households may also own cars that still have DVD players inside.
For Netflix, however, the offering has made less sense in recent years. “Our goal has always been to provide the best service for our members, but as the DVD business continues to shrink, that’s going to become increasingly difficult,” co-CEO Ted Sarandos wrote in a blog post this week.
Shutting down its DVD business could help Netflix better focus 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 – mostly attributable to DVDs – amounted to 0.6% of its revenue, or just over $182 million.
The cost to operate its DVD business may also be a factor, especially as Netflix rethinks expenses broadly amid heightened streaming competition and broader economic uncertainty. “Moving plastic discs around costs far more money than streaming digital bits,” said Eric Schmitt, senior director analyst at Gartner Research. “Removing and replacing damaged and lost inventory are also cost considerations.”
Even before Netflix announced the news this week, some longtime subscribers said they could see the writing on the wall.
“The inventory of available titles, while still vast, had been contracting some over the years with some movies that were once available no longer being so,” Cordy said. “Turnaround times to get a new movie or movies also started to take longer, so I knew it was only a matter of time. But I didn’t want it to end if I could help it.”
Other DVD subscribers are hoping there may still be a happy ending.
On Wednesday, Bill Rouhana, the CEO of Chicken Soup for the Soul Entertainment – which owns DVD rental service Redbox – told The Hollywood Reporter he hopes to purchase Netflix’s DVD business. “I’d like to buy it… I wish Netflix would sell me that business instead of shutting it down,” he said. Redbox remains popular despite the shift in streaming, but took a hit during the pandemic because of the lack of new movies and TV shows to fill the boxes.
A Netflix spokesperson told CNN it has no plans to sell the DVD business and declined to share how it plans to dispose of the discs. But Nick Maggio, a 43-year-old elementary school teacher from Valley Stream, New York, said he hopes the company will sell their individual titles library. “I know there are several titles I’d like to get my hands on,” he said.
For now, at least, some DVD subscribers plan to focus on watching as many DVDs as they can before the service goes away.
McEvoy, who also subscribes to Disney+, Hulu, the Criterion channel and Mubi, said he’s determined to finish seeing every film listed in the book “1001 Movies You Must See Before You Die” with the help of Netflix.
“I absolutely would not have been able to find all of those movies if not for the Netflix DVD service,” he said. “I only have four movies left to go.”
