Netflix nights still come wrapped in red and white envelopes

SANTA CRUZ, CALIFORNIA. – Netflix’s pioneering DVD-by-mail rental service has been relegated to the age of video streaming as a relic, but there’s still a steady – albeit shrinking – audience of diehards like Amanda Konkle who are happy to pay to watch these discs in the Kult get red and white envelopes.

“When you open your mailbox, it’s still something you really want, rather than just bills,” said Konkle, a Savannah, Georgia resident who has subscribed to Netflix’s DVD-by-mail service since 2005.

It’s a small treat enjoyed by Konkle and other still-dedicated DVD subscribers, but it’s not clear for how much longer. Netflix declined to comment on this story, but during a media event in 2018, Netflix co-founder and co-CEO Reed Hastings suggested that the DVD-by-mail service could be retired around 2023.

If — not if — it happens, Netflix will shut down a service that has shipped more than 5 billion discs to the U.S. since it launched almost a quarter-century ago. And it will mirror the demise of thousands of blockbuster video stores that have shut down because they were unable to counter the threat posed by Netflix’s DVD-by-mail alternative.

The eventual demise of its DVD-by-mail service was inevitable since Hastings decided in 2011 to spin it off from a then fledgling video streaming service. It was then that Hastings floated the idea of ​​renaming the service Qwikster – a botched idea was so widely derided that it was lampooned on Saturday Night Live. It eventually settled on its current, more prosaic name, DVD.com. The operation is now based out of a nondescript office in Fremont, California, about 20 miles from Netflix’s elegant campus in Los Gatos, California.

Just prior to the video streaming split, the DVD-by-mail service had more than 16 million subscribers, a number that has now dwindled to an estimated 1.5 million subscribers, all in the United States, based on calculations obtained from the limited disclosures of the service by Netflix in its quarterly reports. Netflix’s video-streaming service now has 223 million subscribers worldwide, including 74 million in the US and Canada.

“The DVD-by-mail business left the Netflix that everyone knows and watches today,” said Marc Randolph, Netflix’s original CEO, during an interview at a coffee shop across from the Post in Santa Cruz, California.

The 110-year-old post office has become a milestone in Silicon Valley history because it was here that Randolph sent a Patsy Cline CD to Hastings in 1997 to test whether a CD could be delivered undamaged by the US Postal Service.

The CD arrived pristine at Hastings’ home, which prompted the duo to launch a DVD-by-mail rental website in 1998, which they always knew would be replaced by even more convenient technology.

“It was planned obsolescence, but we bet it would take longer than most people thought at the time,” Randolph said.

With Netflix’s successful streaming service, it’s easy to assume that anyone still paying to get DVDs in the mail is a technophobe or someone living in a remote part of the US without reliable internet access. But subscribers say they’re sticking with the service so they can rent movies that are otherwise hard to find on streaming services.

For Michael Fusco, 35, those include the 1986 film Power, starring then-young Richard Gere and Denzel Washington, and 1980’s The Big Red One, starring Lee Marvin. That’s one of the main reasons why he’s subscribed to the DVD-by-service since 2006 when he was a freshman and he has no plans to cancel now.

“I’ve been getting it for almost half my life, and it’s played a big role,” Fusco said. “When I was young, it helped me discover voices I probably wouldn’t have heard. I still have memories of getting movies and when they blow my mind.”

Tabetha Neumann is among the subscribers who rediscovered the DVD service during the 2020 pandemic lockdowns after running out of things to watch on her video streaming service. So she and her husband re-registered for the first time since quitting in 2011. Now they like it so much they get a plan that allows them to keep up to three discs at a time, an option that currently costs $20 a month (compared to $10 a month for the one- disc plan).

“Once we started going through all the movies we wanted to see, we found that it was cheaper than paying $5 a movie on some streaming services,” Neumann said. “Also, we found a lot of old horror movies, and that genre isn’t really big in streaming.”

Konkle, who has written a book about Marilyn Monroe films, says she can still find movies on the DVD service — like the 1954 film Cattle Queen of Montana, which starred future US President Ronald Reagan alongside Barbara Stanwyck and the 1983 French film Sugar Cane Alley—which help her teach her film studies courses as an associate professor at Georgia Southern University. It’s a viewing habit she doesn’t typically share with her classes because “most of my students don’t know what a DVD is,” Konkle, 40, said, laughing.

But for all of the DVD service’s attractions, subscribers are starting to see signs of deterioration as the business has dwindled from more than $1 billion in annual sales a year ago to an amount expected to fall below $200 in sales this year becomes.

Katie Cardinale, a subscriber who lives in Hopedale, Massachusetts, says she now has to wait two to four days longer for discs to arrive in the mail than she used to because they are being shipped from a distribution center in New Jersey instead of Boston. (Netflix doesn’t disclose how many DVD distribution centers are still in operation, but there used to be about 50 of them in the US).

Konkle says more discs now have cracks or other defects and take “forever” to replace. And nearly all subscribers have noticed that the selection of DVD titles has dwindled dramatically since the service’s peak years, when Netflix boasted that it had over 100,000 different movies and TV shows on disc.

Netflix no longer discloses the size of its DVD library, but subscribers polled by AP all reported that narrowing the selection makes it harder to find famous movies and popular TV series that used to be routinely available on the service. Instead, Netflix is ​​now sorting requests for titles like the first season of the award-winning “Ted Lasso” series — a release that’s available to buy on DVD — into a “saved” queue, signaling that it may decide to pick them up in the future To have stock as needed.

Knowing the end is in sight, Randolph said he will mourn the demise of the DVD service he brought to life and take comfort in the knowledge that his legacy will live on.

“Netflix’s DVD business was an integral part of what Netflix was and still is,” he said. “It’s embedded in the company’s DNA.”

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