Netflix’s famous red envelopes are headed to the recycling bin of history.
The company announced the shutdown of the DVD-by-mail business Tuesday ahead of its first-quarter 2023 earnings report. Since 1998, according to the company, it has mailed out more than 5 billion DVD and Blu-ray rentals to subscribers across the U.S.
The final Netflix DVDs will be shipped out on Sept. 29, 2023, according to co-CEO Ted Sarandos.
“After an incredible 25 year run, we’ve decided to wind down DVD.com later this year,” Sarandos wrote in a blog post on the company’s site. “Our goal has always been to provide the best service for our members but as the business continues to shrink that’s going to become increasingly difficult. So we want to go out on a high, and will be shipping our final discs on September 29, 2023.”
Netflix’s revenue from the DVD-by-mail biz has — by design — steadily declined over the years, as the company wanted to push members toward the streaming service. In 2022, the DVD business generated $145.7 million (down 20% from the year prior), which represented just 0.5% of its total revenue.
“From the beginning, our members loved the choice and control that direct-to-consumer entertainment offered: the wide variety of the titles and the ability to binge watch entire series,” Sarandos wrote. DVDs also led to Netflix’s first foray into original programming, with Red Envelope Entertainment titles including “Sherrybaby” and “Zach Galifianakis Live at the Purple Onion.”
Netflix first launched video-streaming in 2007, and originally that was part of its DVD-by-mail subscription plans. In 2011, Netflix made the disastrous decision to split Netflix streaming from the newly named Qwikster DVD-by-mail business — a move the company reversed after less than a month and following a slew of cancellations.
Sarandos, before joining Netflix in 2000 as head of content operations, oversaw product and merchandising for home video-rental chain Video City/West Coast Video.
“We feel so privileged to have been able to share movie nights with our DVD members for so long, so proud of what our employees achieved and excited to continue pleasing entertainment fans for many more decades to come,” said Sarandos. “To everyone who ever added a DVD to their queue or waited by the mailbox for a red envelope to arrive: thank you.” (Variety)
