Netflix nights still come wrapped in red and white envelopes


Santa Cruz, California. (AP) — Netflix’s pioneering DVD-by-mail rental service has been relegated to a holdover in the age of video streaming, but there’s still a steady — shrinking — audience of hard-core viewers like Amanda Konkle willing to pay to get those discs in. the coveted red and white envelopes.

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

It’s a small pleasure that Konkle and other still devoted DVD subscribers enjoy, but it’s unclear for how long. Netflix declined to comment on this story, but at a media event in 2018, Netflix co-founder and co-CEO Reed Hastings suggested that the DVD-by-mail service could be shut down around 2023.

When that doesn’t happen, Netflix will shut down the service that has shipped more than 5 billion discs across America since its inception nearly a quarter of a century ago. And it will mirror the collapse of the thousands of Blockbuster video stores that closed because they couldn’t compete with the threat posed by Netflix’s DVD-by-mail option.

The end of the DVD-by-mail service was inevitable since Hastings decided in 2011 to separate it from a then-nascent video streaming service. Then Hastings came up with the idea of ​​renaming the service Qwikster — a complicated idea that was so widely ridiculed that it was satirized on “Saturday Night Live.” It eventually settled on its current, more affluent handle, Its operations are now located in a nondescript office in Fremont, California, about 20 miles from Netflix’s flashy campus in Los Gatos, California.

Shortly before its separation from video streaming, the DVD-by-mail service had more than 16 million subscribers, a number that has now dropped to 1.5 million subscribers, all in the US, according to calculations derived from the service’s limited disclosure by Netflix. In its quarterly report based on Netflix, the video streaming service now has 223 million subscribers worldwide, of which 74 million are in the US and Canada.

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

The 110-year-old post office has become a landmark in Silicon Valley history because Randolph sent a Patsy Cline CD to Hastings here in 1997 to test whether it would pass through the US Postal Service without damage. Whether or not a disc can be delivered

The disc arrived flawlessly at Hastings’ home, prompting the pair to launch a DVD rental by mail website in 1998, which they always knew would be replaced by even more convenient technology.

Randolph said, “It was a plan to be out of date, but we bet it would take longer than most people thought at the time.”

With Netflix’s successful streaming service, it’s easy to assume that anyone who pays to receive DVDs in the mail is a technophobe or someone who lives in a remote part of the US without reliable internet access. But customers say they’re sticking with the service so they can rent movies that would otherwise be hard to find on streaming services.

For Michael Fusco, 35, that includes the 1986 movie “Power” starring a then-young Richard Gere and Denzel Washington, and the 1980 movie “The Big Red One” starring Lee Marvin. It’s one of the main reasons why he’s been subscribing to the DVD-by service since 2006, when he was just a freshman in college, and has no plans to cancel it now.

“I’ve had it almost half my life, and it’s been a big part,” Fusco said. “When I was younger, it helped me discover voices I might not have heard. I still have memories of going to and starring in movies that amaze me.

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Tabetha Newman is one of the customers who rediscovered the DVD service in 2020 during the pandemic lockdown, when the video streaming service was down. So she and her husband signed back in for the first time since canceling in 2011. Now they like it so much that they have a plan that allows them to have up to three drives at a time, an option that currently costs $20 a month (compared to $10 a month for the single-drive plan). ).

Newman said, “Once we started watching all the movies we wanted to see, we realized it was cheaper than paying $5 a movie on some streaming services.” “Plus, we have a lot of old horror movies, and that genre hasn’t really been big in streaming.”

Konkle, who wrote a book about Marilyn Monroe’s movies, says she still gets the movies on DVD, such as the 1954 movie “Cattle Queen of Montana” starring future US President Ronald Reagan. Barbara Stanwyck and the 1983 French film “Sugar.” Ken Ely” – who helps her teach her film studies classes as an associate professor at Georgia Southern University. It’s a viewing habit she doesn’t usually share with her classes because “most of my students don’t know what a DVD is,” Konkle, 40, said with a laugh.

But for all the appeal of the DVD service, customers are starting to see signs of decline as the company plummets from generating more than $1 billion in annual revenue a year ago to falling below $200 billion in revenue this year. .

Katie Cardinale, a customer who lives in Hopedale, Massachusetts, says she now has to wait an extra two to four days for the drives to arrive in the mail because they ship from a distribution center in New Jersey instead of Boston. (Netflix does not disclose how many DVD distribution centers are still operating, but there were once about 50 in the US).

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Konkle says there are now more discs with cracks or other defects and it takes “an eternity” to replace them. And almost all subscribers have noticed that the selection of DVD titles has shrunk dramatically since the service’s peak years, when Netflix claimed there were more than 100,000 different movies and TV shows on disc.

Netflix no longer discloses the size of its DVD library, but all customers interviewed by the AP reported that the limited selection makes it difficult to find well-known movies and popular TV series that were once regularly available on the service. Instead, Netflix is ​​now sorting the first season of the award-winning “Ted Lasso” series – a release available for purchase on DVD – by sorting requests for titles into a “saved” queue, indicating that it will be added in the future. stored. can decide to do so. , depending on the question.

Knowing the end was in sight, Randolph said he would mourn the death of the DVD service he brought to life while comfortably living out his legacy.

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




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