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To support your point … Just 3-years ago, the DVD business was generating $200M in revenue. Today, it’s only $120m. That means total revenues are down 66% in

To support your point … Just 3-years ago, the DVD business was generating $200M in revenue. Today, it’s only $120m. That means total revenues are down 66% in just 3-years. You can’t fault Netflix for wanting to divest a business that is rapidly declining. And that doesn’t even speak to the profitably of that business unit which is fair to assume to be losing money when you have such rapid revenue decline. https://www.mediaplaynews.com/netflix-indifference-to-disc-rentals-not-surprising/ https://www.mediaplaynews.com/netflix-indifference-to-disc-r...

im_z 3y ago
It's not a natural death. They've done nothing to maintain it. They reduced distribution centres (thus increasing wait times) and they haven't replaced many of the titles that have become damaged, so they are unavailable. It's no wonder people are leaving in large rates, because what they used to offer was unparalleled access to films and TV. 100k titles. No streamer has that.
- alephnerd 3y ago
  Companies have a finite amount of money. If the DVD and Blu-ray rental userbase is dropping, I could cut that division's budget in half and move it to another division that is generating much stronger traction (eg. Netflix Korea and their KDrama acquisitions making Netflix a market leader in Asia). The TAM of the DVD/Blu-Ray rental market has fallen, so as a company, it's best for me to fire those customers - either by slowly degrading the service so they change to the mainstream service, or deprecating the entire service. > 100k titles. No streamer has that. But 1. Do does a large enough userbase actually want that? 2. Can that large enough userbase spend enough margins on that service to generate a healthy profit? 3. Are my operating costs for that division rising faster than the revenue from that division? If all 3 of those answers aren't satisfactory, you end up shutting down an initiative. Also, there's always FMovies or Pirating for those who really really want it.
  - rtkwe 3y ago
    It's a chicken and egg argument, we don't have access to the internal metrics to really know which came first, sliding users or diversion of resources to quietly kill the project.
    - listenallyall 3y ago
      No, it's really not. DVD sales are way down, DVD player sales are down, many young people have never touched a DVD.
      - rtkwe 3y ago
        I'm not particularly shocked dedicated player sales are down given how ubiquitous DVD players are in basically everything (laptops, desktops and game consoles) and how long they last. Also that doesn't really answer how that trend was spooling out to the mail order rental business over the recent past, people have been using streaming a lot for ages but the business still made sense to keep going before so what in the near term finally made the lines cross?
        alephnerd 3y ago
        Off the top of my head, the costs of logistics has skyrocketed since COVID due to staffing shortages and Teamster Union actions/strikes.
        rtkwe 3y ago
        Have costs actually increased for the kind of small packages Netflix is sending disks in? The rate for large shipments by the container load have fallen back to around their pre pandemic levels from what I'm seeing in a quick search. That's not really relevant to the kind of shipping costs Netflix would be seeing for it's disk service though but I'm not really finding a chart tracking that. https://www.statista.com/statistics/1250636/global-container-freight-index/ https://www.statista.com/statistics/1250636/global-container...
        3y ago
- jorvi 3y ago
  Yup. People fail to realize that the question is not "can I use $100 to run a business that will generate $140 of profit over 7 years", but "in 7 years, what gives me the most return for my $100".
- lozenge 3y ago
  I can't watch DVDs in most of the places I want to consume media any more, and that's increasingly common. Other DVD suppliers are also seeing a big drop in revenue, not just Netflix. Can you even get a 15" laptop with a dvd drive these days?
  - PopAlongKid 3y ago
    You can get an external blu ray drive powered off the USB connection for not much, maybe $50 but I haven't checked recently. I was recently in a vacation rental and easily plugged my laptop via HDMI cable to the large screen TV, worked great for watching disc-based movies.
  - parenthesis 3y ago
    It's 17", not 15", but I recently bought one of these https://junocomputers.com/product/nyx-17-v3/ https://junocomputers.com/product/nyx-17-v3/ for watching DVDs.
    - acidburnNSA 3y ago
      Oh sweet it also has a VGA output.
- dotnet00 3y ago
  It has been a decade since I owned a computer with a dvd drive and similarly long since I had to use a dvd at all, and I'm much more of a techie than the average person. The simple fact is that most people by now don't even have the means to play dvds.
  - rchaud 3y ago
    You say you're more of a techie than the average person, so it follows that you have no use for a DVD drive. What about the millions of other people that have had a perfectly fine DVD player in their homes for several years? It isn't just DVD players. I've never purchased a standalone player, it came built in on my Playstation. It's only in the most modern generation of consoles that you have a choice to buy a disc drive-less version.
    - VBprogrammer 3y ago
      The counter point to that is that DVDs look terrible on modern 60" TVs. You don't have to be a techie to have one of those. Even my 93 year old grandmother has one.
      - rchaud 3y ago
        Movies and TV shows before 2008 weren't commercially available in resolution above DVD quality, unless special efforts were made to upscale and re-release them.
        im_z 3y ago
        "Upscale" is the wrong word here. The film is scanned at a higher resolution. If it was shot on tape then yes it has to be upscaled but almost no films were shot on tape.
    - dotnet00 3y ago
      By more of a techie, I mean to say that I am capable of buying an external reader and dealing with many more hurdles if needed to get something done (eg to read a dvd). So not having a built-in drive would've been less of a hurdle for me, if I had needed to read a dvd. I have never been a TV console gamer (always been a handheld person), so I concede that point.
- dangus 3y ago
  How do you maintain distribution centers with a rapidly declining customer base? Distribution centers closed because customers canceled their subscriptions. Streamers do have unparalleled access to films and TV. Instantly. No waiting for DVDs that are out of stock. Ignore the fact that streaming costs more. Why does that matter? It’s a better product. Spotify disrupted a free product in pirated music. Price is not the only consideration when it comes to product choice. The US alone has almost a half a million active streaming service subscriptions. Netflix DVD has 1/500th of that subscriber base.
Jenk 3y ago
Apologies but I feel lile this is quite an important distinction to make: > down 66% down to 66%. "down X" suggests/implies down by X.
- MattRix 3y ago
  also it’s 60%, not 66% like they said
artursapek 3y ago
My brother in Christ, that is down 40%.
skeeter2020 3y ago
and yet companies can make a successful business out of vinyl, and even cassette tapes - just not at the scale that Netflix demands. This is the OP's point I think.

im_z 3y ago

It's not a natural death. They've done nothing to maintain it. They reduced distribution centres (thus increasing wait times) and they haven't replaced many of the titles that have become damaged, so they are unavailable. It's no wonder people are leaving in large rates, because what they used to offer was unparalleled access to films and TV. 100k titles. No streamer has that.

alephnerd 3y ago
Companies have a finite amount of money. If the DVD and Blu-ray rental userbase is dropping, I could cut that division's budget in half and move it to another division that is generating much stronger traction (eg. Netflix Korea and their KDrama acquisitions making Netflix a market leader in Asia). The TAM of the DVD/Blu-Ray rental market has fallen, so as a company, it's best for me to fire those customers - either by slowly degrading the service so they change to the mainstream service, or deprecating the entire service. > 100k titles. No streamer has that. But 1. Do does a large enough userbase actually want that? 2. Can that large enough userbase spend enough margins on that service to generate a healthy profit? 3. Are my operating costs for that division rising faster than the revenue from that division? If all 3 of those answers aren't satisfactory, you end up shutting down an initiative. Also, there's always FMovies or Pirating for those who really really want it.
- rtkwe 3y ago
  It's a chicken and egg argument, we don't have access to the internal metrics to really know which came first, sliding users or diversion of resources to quietly kill the project.
  - listenallyall 3y ago
    No, it's really not. DVD sales are way down, DVD player sales are down, many young people have never touched a DVD.
    - rtkwe 3y ago
      I'm not particularly shocked dedicated player sales are down given how ubiquitous DVD players are in basically everything (laptops, desktops and game consoles) and how long they last. Also that doesn't really answer how that trend was spooling out to the mail order rental business over the recent past, people have been using streaming a lot for ages but the business still made sense to keep going before so what in the near term finally made the lines cross?
      - alephnerd 3y ago
        Off the top of my head, the costs of logistics has skyrocketed since COVID due to staffing shortages and Teamster Union actions/strikes.
        rtkwe 3y ago
        Have costs actually increased for the kind of small packages Netflix is sending disks in? The rate for large shipments by the container load have fallen back to around their pre pandemic levels from what I'm seeing in a quick search. That's not really relevant to the kind of shipping costs Netflix would be seeing for it's disk service though but I'm not really finding a chart tracking that. https://www.statista.com/statistics/1250636/global-container-freight-index/ https://www.statista.com/statistics/1250636/global-container...
      - 3y ago
jorvi 3y ago
Yup. People fail to realize that the question is not "can I use $100 to run a business that will generate $140 of profit over 7 years", but "in 7 years, what gives me the most return for my $100".
lozenge 3y ago
I can't watch DVDs in most of the places I want to consume media any more, and that's increasingly common. Other DVD suppliers are also seeing a big drop in revenue, not just Netflix. Can you even get a 15" laptop with a dvd drive these days?
- PopAlongKid 3y ago
  You can get an external blu ray drive powered off the USB connection for not much, maybe $50 but I haven't checked recently. I was recently in a vacation rental and easily plugged my laptop via HDMI cable to the large screen TV, worked great for watching disc-based movies.
- parenthesis 3y ago
  It's 17", not 15", but I recently bought one of these https://junocomputers.com/product/nyx-17-v3/ https://junocomputers.com/product/nyx-17-v3/ for watching DVDs.
  - acidburnNSA 3y ago
    Oh sweet it also has a VGA output.
dotnet00 3y ago
It has been a decade since I owned a computer with a dvd drive and similarly long since I had to use a dvd at all, and I'm much more of a techie than the average person. The simple fact is that most people by now don't even have the means to play dvds.
- rchaud 3y ago
  You say you're more of a techie than the average person, so it follows that you have no use for a DVD drive. What about the millions of other people that have had a perfectly fine DVD player in their homes for several years? It isn't just DVD players. I've never purchased a standalone player, it came built in on my Playstation. It's only in the most modern generation of consoles that you have a choice to buy a disc drive-less version.
  - VBprogrammer 3y ago
    The counter point to that is that DVDs look terrible on modern 60" TVs. You don't have to be a techie to have one of those. Even my 93 year old grandmother has one.
    - rchaud 3y ago
      Movies and TV shows before 2008 weren't commercially available in resolution above DVD quality, unless special efforts were made to upscale and re-release them.
      - im_z 3y ago
        "Upscale" is the wrong word here. The film is scanned at a higher resolution. If it was shot on tape then yes it has to be upscaled but almost no films were shot on tape.
  - dotnet00 3y ago
    By more of a techie, I mean to say that I am capable of buying an external reader and dealing with many more hurdles if needed to get something done (eg to read a dvd). So not having a built-in drive would've been less of a hurdle for me, if I had needed to read a dvd. I have never been a TV console gamer (always been a handheld person), so I concede that point.
dangus 3y ago
How do you maintain distribution centers with a rapidly declining customer base? Distribution centers closed because customers canceled their subscriptions. Streamers do have unparalleled access to films and TV. Instantly. No waiting for DVDs that are out of stock. Ignore the fact that streaming costs more. Why does that matter? It’s a better product. Spotify disrupted a free product in pirated music. Price is not the only consideration when it comes to product choice. The US alone has almost a half a million active streaming service subscriptions. Netflix DVD has 1/500th of that subscriber base.

Jenk 3y ago

Apologies but I feel lile this is quite an important distinction to make: > down 66% down to 66%. "down X" suggests/implies down by X.

MattRix 3y ago
also it’s 60%, not 66% like they said

artursapek 3y ago

My brother in Christ, that is down 40%.

skeeter2020 3y ago

and yet companies can make a successful business out of vinyl, and even cassette tapes - just not at the scale that Netflix demands. This is the OP's point I think.