6 ms·

This is why I'm still surprised they separated out (and eventually killed) their disc-by-mail service. I understand the visceral feeling that discs are an antiq

This is why I'm still surprised they separated out (and eventually killed) their disc-by-mail service. I understand the visceral feeling that discs are an antiquated relic—but you just can't beat that catalog. Combining discs and streaming in one subscription provides customers with the best of both worlds. Need something to watch right now? No problem, we have an excellent streaming catalog and you're going to love Stranger Things! Want a specific movie or show, maybe Friends or The Lion King? We've got that too, it'll be in your mailbox in a couple days. And if some customers choose to forgo either the digital or physical side of the package, it doesn't cost Netflix anything.

munificent 3y ago
I'm sure they just ran the numbers and realized that being both a data streaming software company and a physical package logistics company just didn't add up. Every dollar they spent on the latter would have net them more profit if they instead invested it in the former.
- Wowfunhappy 3y ago
  Maybe--I of course don't have their numbers--but remember that Netflix kept offering discs up until last year, just under a separate subscription. So they were still investing some money. I think Netflix got cocky. When Netflix separated the plans, streaming rights were cheap and Netflix's streaming catalog was growing quickly. They didn't foresee the market becoming so competitive. Continuing to offer discs would have allowed Netflix to hedge their bets and avoid relying on rights-holders. The original content push did that too, but at a much higher cost. If keeping DVDs meant Netflix could produce a few less original shows per year, that seems worth the trade.
  - PaulHoule 3y ago
    The transition from not needing a license (mailing discs) to renting content to owning it was intrinsic in their business plan all along. They saw that streaming was the future but that mailing discs would let them build a big brand early on, but they took the disc market very seriously and optimized it. Once you're streaming the cost structure is like this: Fox or Disney or someone like that will charge them $X /month/sub but it costs $Y to create a piece of content, independent of how many subscribers you have. There is a crossover point where you have enough subscribers that it makes sense to own.
closewith 3y ago
I'd say the majority of their customers wouldn't have a way to play the discs if sent.
- Pxtl 3y ago
  Right? I have a half-dozen old devices around my house that could play a DVD, but I've never owned anything that can play bluRay, much less 4K disks (I've never even seen one of those IRL). And DVDs are no longer worth bothering with mostly because of the aspect ratio hassle if nothing else.
  - piperswe 3y ago
    Many people own an Xbox One S/X, Xbox Series X, or PS5, which can all play 4K Blu-ray. Many more people own a PS3, PS4, or regular Xbox One, which can all play regular Blu-ray.
    - LoganDark 3y ago
      Xbox One S/X doesn't have a disc drive, Xbox Series X doesn't have a disc drive, PS5 needs the disc drive bought separately and paired over the internet. Only the original Xbox One had a disc drive integrated.
      - endisneigh 3y ago
        > Xbox One S/X doesn't have a disc drive, Xbox Series X doesn't have a disc drive, PS5 needs the disc drive bought separately and paired over the internet. Only the original Xbox One had a disc drive integrated. It’s always fascinating that people say things that are verifiably untrue. Like, really?
        afavour 3y ago
        OP may have meant Xbox Series S and X? Honestly a partly blame MS, their console naming has always baffled me.
Kluggy 3y ago
I'm more surprised they didn't sell it off so it could keep running, as the claims were that it was still profitable. I was a die hard subscriber to the end. I would have happily paid more money per month to get access to 4k disks as well
tomnipotent 3y ago
The DVD business was ~1% of total revenues by the time they shuttered it. At that point, it was no longer really cost effective for them to retain such a large physical infrastructure for so little ROI.

munificent 3y ago

I'm sure they just ran the numbers and realized that being both a data streaming software company and a physical package logistics company just didn't add up. Every dollar they spent on the latter would have net them more profit if they instead invested it in the former.

Wowfunhappy 3y ago
Maybe--I of course don't have their numbers--but remember that Netflix kept offering discs up until last year, just under a separate subscription. So they were still investing some money. I think Netflix got cocky. When Netflix separated the plans, streaming rights were cheap and Netflix's streaming catalog was growing quickly. They didn't foresee the market becoming so competitive. Continuing to offer discs would have allowed Netflix to hedge their bets and avoid relying on rights-holders. The original content push did that too, but at a much higher cost. If keeping DVDs meant Netflix could produce a few less original shows per year, that seems worth the trade.
- PaulHoule 3y ago
  The transition from not needing a license (mailing discs) to renting content to owning it was intrinsic in their business plan all along. They saw that streaming was the future but that mailing discs would let them build a big brand early on, but they took the disc market very seriously and optimized it. Once you're streaming the cost structure is like this: Fox or Disney or someone like that will charge them $X /month/sub but it costs $Y to create a piece of content, independent of how many subscribers you have. There is a crossover point where you have enough subscribers that it makes sense to own.

closewith 3y ago

I'd say the majority of their customers wouldn't have a way to play the discs if sent.

Pxtl 3y ago
Right? I have a half-dozen old devices around my house that could play a DVD, but I've never owned anything that can play bluRay, much less 4K disks (I've never even seen one of those IRL). And DVDs are no longer worth bothering with mostly because of the aspect ratio hassle if nothing else.
- piperswe 3y ago
  Many people own an Xbox One S/X, Xbox Series X, or PS5, which can all play 4K Blu-ray. Many more people own a PS3, PS4, or regular Xbox One, which can all play regular Blu-ray.
  - LoganDark 3y ago
    Xbox One S/X doesn't have a disc drive, Xbox Series X doesn't have a disc drive, PS5 needs the disc drive bought separately and paired over the internet. Only the original Xbox One had a disc drive integrated.
    - endisneigh 3y ago
      > Xbox One S/X doesn't have a disc drive, Xbox Series X doesn't have a disc drive, PS5 needs the disc drive bought separately and paired over the internet. Only the original Xbox One had a disc drive integrated. It’s always fascinating that people say things that are verifiably untrue. Like, really?
      - afavour 3y ago
        OP may have meant Xbox Series S and X? Honestly a partly blame MS, their console naming has always baffled me.

Kluggy 3y ago

I'm more surprised they didn't sell it off so it could keep running, as the claims were that it was still profitable. I was a die hard subscriber to the end. I would have happily paid more money per month to get access to 4k disks as well

tomnipotent 3y ago

The DVD business was ~1% of total revenues by the time they shuttered it. At that point, it was no longer really cost effective for them to retain such a large physical infrastructure for so little ROI.