The curtain is finally coming down on Netflix害羞草研究所檚 once-iconic DVD-by-mail service, a quarter century after two Silicon Valley entrepreneurs came up with a concept that obliterated Blockbuster video stores while providing a springboard into video streaming that has transformed entertainment.
The DVD service that has been in the shadow of Netflix害羞草研究所檚 video streaming service will shut down after its five remaining distribution centers in California, Texas, Georgia and New Jersey mail out their final discs Friday.
The fewer than 1 million recipients who still subscribe to the DVD service will be able to keep the final discs that land in their mailboxes.
Some of the remaining DVD diehards will get up to 10 discs as a going away present from a service that boasted as many as 16 million subscribers. That was before Netflix made the pivotal decision in 2011 to separate the DVD side business from a streaming business that now boasts 238 million subscribers and generated $31.5 billion in revenue year.
The DVD service, in contrast, brought in just $146 million in revenue last year, making its eventual closure inevitable against a backdrop of that has forced Netflix to whittle expenses to boost its profits.
害羞草研究所淚t is very bittersweet.害羞草研究所� Marc Randolph, Netflix害羞草研究所檚 CEO when the company shipped its first DVD, 害羞草研究所満π卟菅芯克鶟Beetlejuice,害羞草研究所� in April 1998. 害羞草研究所淲e knew this day was coming, but the miraculous thing is that it didn害羞草研究所檛 come 15 years ago.害羞草研究所�
Although he hasn害羞草研究所檛 been involved in Netflix害羞草研究所檚 day-to-day operations for 20 years, Randolph came up with the idea for a DVD-by-service in 1997 with his friend and fellow entrepreneur, Reed Hastings, who eventually succeeded him as CEO 害羞草研究所� a job Hastings held until earlier this year.
Back when Randolph and Hastings were mulling the concept, the DVD format was such a nascent technology that there were only about 300 titles available at the time (at its height, Netflix害羞草研究所檚 DVD service boasted more than 100,000 different titles)
In 1997, DVDs were so hard to find that when they decided to test whether a disc could make it thorough the U.S. Postal Service that Randolph wound up slipping a CD containing Patsy Cline害羞草研究所檚 greatest hits into a pink envelope and dropping it in the mail to Hastings from the Santa Cruz, California post office.
Randolph paid just 32 cents for the stamp to mail that CD, less than half the current cost of 66 cents for a first-class stamp.
Netflix quickly built a base of loyal movie fans while relying on a then-novel monthly subscription model that allowed customers to keep discs for as long as they wanted without facing the late fees that Blockbuster imposed for tardy returns. Renting DVDs through the mail became so popular that Netflix once ranked as the U.S. Postal Service害羞草研究所檚 fifth largest customer while mailing millions of discs each week from nearly 60 U.S. distribution centers at its peak.
Along the way, the red-and-white envelopes that delivered the DVDs to subscribers害羞草研究所� homes became an eagerly anticipated piece of mail that turned enjoying a 害羞草研究所淣etflix night害羞草研究所� into a cultural phenomenon. The DVD service also spelled the end of Blockbuster, which went bankrupt in 2010 after its management turned down an opportunity to buy Netflix instead of trying to compete against it.
But Randolph and Hastings always planned on video streaming rendering the DVD-by-mail service obsolescent once technology advanced to the point that watching movies and TV shows through internet connections became viable. That expectation is one of the reasons they settled on Netflix as the service害羞草研究所檚 name instead of other monikers that were considered, such as CinemaCenter, Fastforward, NowShowing and DirectPix (the DVD service was dubbed 害羞草研究所淜ibble,害羞草研究所� during a six-month testing period)
害羞草研究所淔rom Day One, we knew that DVDs would go away, that this was transitory step,害羞草研究所� Randolph said. 害羞草研究所淎nd the DVD service did that job miraculously well. It was like an unsung booster rocket that got Netflix into orbit and then dropped back to earth after 25 years. That害羞草研究所檚 pretty impressive.害羞草研究所�
Michael Liedtke, The Associated Press
