Netflix Ends An Era That Changed Movies At Home Forever

By Douglas Helm | Updated

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Credit: Tumisu

The days of video and DVD rentals have essentially been over for a while, but many people may not be aware that Netflix’s long-running DVD-by-mail service has still been in operation — until now. The streamer is finally shuttering the service that started it all and changed the at-home movie industry forever (via AP News). The service has gradually been shrinking over the years, and the remaining distribution centers in California, Texas, Georgia, and New Jersey will be wrapping things up after sending out the final discs this Friday.

Netflix has finally stopped sending DVDs by mail, the groundbreaking practice that built the streaming giant.

Netflix’s DVD service currently has fewer than one million subscribers, and those subscribers will get to keep the incoming discs as a final thank-you for their customer loyalty. Some of the subscribers will even get to keep up to ten discs as a final present from the streaming giant. At its peak, the DVD-by-mail service had over 20 million subscribers and over 100,000 titles available to select for mail delivery.

With Netflix looking to cut back expenses in the ever-expanding, highly competitive world of streaming services, the DVD-by-mail service has been doomed for a while. The streaming service raked in $31.5 billion in revenue last year from over 238 million subscribers compared to the $146 million that the DVD business made. The DVD business has been separate from the primary streaming business for a long time now, with the two splitting in 2011.

Netflix has outgrown the DVD-by-mail service to become one of the largest entertainment companies in the world.

Although Netflix is now known as a massive streaming corporation, its humble beginnings were from these DVD-by-mail services. In 1997, Marc Randolph and Reed Hastings decided to try a DVD-by-mail service since DVDs were so rare and hard to find at the time. They tested the idea by sending a Patsy Cline’s Greatest Hits CD to see if the disks could reach their destination.

The experiment worked, and the CD only cost a measly 32 cents to send. Netflix quickly built a customer base of monthly subscribers, who could easily get their DVDs in their own mailbox and keep them as long as they wanted without worrying about late fees. The model exploded in popularity and caused the company to become the U.S. Postal Service’s fifth-largest customer at its peak.

The first item sent by the founders of Netflix was Patsy Cline’s Greatest Hits on CD.

The rise of Netflix also ended up being the nail in the coffin for video rental stores, with the once massively popular Blockbuster being the most notable victim. The video rental store filed for bankruptcy in 2010, not too long after turning down an offer to buy Netflix. One official Blockbuster remains in Bend, Oregon, while streaming has become the dominant form of home media.

Streaming did end up taking over the world, but many movie lovers opted to keep their Netflix DVD-by-mail subscription. This is because the service had a decent library of movies that were hard to find in stores or hard to find on streaming services. While all of these subscribers are undoubtedly a bit disappointed that the DVD-by-mail service is finally coming to an end, it’s a bit amazing that it even lasted this long in the first place.