The streaming company has declared that the DVD-by-mail service will be discontinued by the end of September.
Netflix will bid farewell to the iconic red envelopes used for mailing DVDs of movies and shows to subscribers, as announced by co-CEO Ted Sarandos. Sarandos acknowledged that DVD mailing was crucial in transitioning to streaming, but after a remarkable 25 years, the company has made the tough call to discontinue this service by September’s end.
Sarandos stated that with the shrinking of the business, providing optimal service to members will become more challenging. Netflix was created as an alternative to video rental stores where customers could rent DVDs that were mailed to their homes. The company’s first-ever DVD mailed to a customer was Tim Burton’s 1988 film, Beetlejuice.
The business strategy became successful, and as a result, Blockbuster, the largest video rental store chain, and its competitors faced difficulties.
Netflix’s announcement to end its DVD-by-mail service coincided with the release of its first-quarter results that were a mix of good and bad news. Although the company’s revenues for the quarter were $8.18bn, a bit lower than analysts’ expectations, it managed to gain 1.75 million new subscribers, taking its total customer base to 232.5 million.
Last year, Netflix revealed a loss of subscribers for the first time in ten years, which resulted in a decline in the company’s stock price. With fierce competition from competitors like Apple, Disney, and Hulu, Netflix is introducing new ad-supported subscription plans and tightening its grip on password-sharing. The program has been piloted in Chile, Costa Rica, and Peru.
However, the company announced on Tuesday that it is postponing the wider implementation of its password-sharing restrictions, which were initially planned to roll out in late Q1. Instead, it will begin to enforce the rules more extensively by the end of June.
