Yes, that change happened early on. They could print DVDs on demand at negligible cost to Netflix and in return the studios received a fixed fee per rental inst

Yes, that change happened early on. They could print DVDs on demand at negligible cost to Netflix and in return the studios received a fixed fee per rental instead of a fixed fee per DVD. A major problem was the high breakage rate for the DVDs they were renting. This created issues with the supply chain of new DVDs to replace broken ones since DVDs are not considered continuously consumed, disposable products. Additionally, it made it easier to manage the bursty nature of demand for particular DVDs since you no longer had to optimize the economics around the number of rentals per physical DVD.