3 ms·

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. E

• 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.