NATIONAL NEWS

Netflix shutters its DVD rental business, marking the end of the red envelope era

Sep 28, 2023, 4:05 PM

Netflix is shutting down its DVD-by-mail business
Mandatory Credit:	Andrew Harrer/Bloomberg/Getty I...

Netflix is shutting down its DVD-by-mail business Mandatory Credit: Andrew Harrer/Bloomberg/Getty Images

(CNN) — Netflix will send out its last red envelope on Friday, marking an end to 25 years of mailing DVDs to members.

The company announced earlier this year it is shutting down its DVD-by-mail service, 16 years after it gradually shifted its focus to streaming content online. Netflix will continue to accept returns of customers’ remaining DVDs until October 27.

Introduced in 1998 when Netflix first launched, the DVD service promised an easier rental experience than having to drive to the nearest Blockbuster or Hollywood Video. The red envelopes, which have long been synonymous with Netflix itself, littered homes and dorm rooms across the country.

Although the idea of receiving a DVD in the mail now may sound almost as outdated as dial-up internet, some longtime customers told CNN they continued to find value in the DVD option.

DVD fans holding on

Colin McEvoy, a father of two from Bethlehem, Pennsylvania and a self-described film fanatic, said he rushed through 40 movies in the last few weeks to get through the remainder of his queue before the service ends. McEvoy has remained faithful to Netflix’s DVD service so he can keep watching Bollywood and obscure independent films not often found on streaming services.

“I was basically watching them as soon as I got them, and then returning the discs as quickly as possible to get as many as I could,” said McEvoy, who has been using Netflix’s DVD-by-mail service since 2001, just three years after it launched.

“I remember I was in high school when I first signed up for it, and the concept was so novel I had to really convince my dad that it was a legit service and not some sort of Internet scam,” said McEvoy, who uses an old Xbox 360 to play his Netflix DVDs. “Now I have friends who’ve seen my red Netflix envelopes arrive in the mail, and either didn’t remember what they were or couldn’t believe that I still got the DVDs in the mail.”

Some other Netflix users stood by its DVD service not only for the selection but for added perks. Brandon Cordy, a 41-year-old graphic designer from Atlanta, previously told CNN he stuck with DVDs because many digital rentals don’t come with special features or audio commentaries.

There are other factors, too. Michael Inouye, an analyst at ABI Research, said some consumers may still not have access to reliable or fast enough broadband connections, or simply prefer physical media to digital, much in the way that some audio enthusiasts still purchase and collect CDs and records.

Why Netflix is quitting DVDs

For Netflix, however, the offering has made less sense in recent years. “Our goal has always been to provide the best service for our members, but as the DVD business continues to shrink, that’s going to become increasingly difficult,” co-CEO Ted Sarandos wrote in a blog post in April.

Shutting down its DVD business could help Netflix better focus resources as it expands into new markets such as gaming as well as live and interactive content. Its DVD business has also declined significantly in recent years. In 2021, Netflix’s non-streaming revenue – mostly attributable to DVDs – amounted to 0.6% of its revenue, or just over $182 million.

The cost to operate its DVD business may also be a factor, especially as Netflix rethinks expenses broadly amid heightened streaming competition and broader economic uncertainty. “Moving plastic discs around costs far more money than streaming digital bits,” said Eric Schmitt, senior director analyst at Gartner Research. “Removing and replacing damaged and lost inventory are also cost considerations.”

Even before Netflix announced the news, some longtime subscribers said they could see the writing on the wall.

“The inventory of available titles, while still vast, had been contracting some over the years with some movies that were once available no longer being so,” Cordy said. “Turnaround times to get a new movie or movies also started to take longer, so I knew it was only a matter of time. But I didn’t want it to end if I could help it.”

Little hope for a DVD revival

Other DVD subscribers were hoping for a happy ending. Bill Rouhana, the CEO of Chicken Soup for the Soul Entertainment – which owns DVD rental service Redbox – told The Hollywood Reporter in April he hoped to purchase Netflix’s DVD business. “I’d like to buy it… I wish Netflix would sell me that business instead of shutting it down,” he said. Redbox remains popular despite the shift in streaming, but took a hit during the pandemic because of the lack of new movies and TV shows to fill the boxes.

A Netflix spokesperson previously told CNN it has no plans to sell the DVD business and declined to share how it plans to dispose of the discs. In the weeks leading up to the shut down, Netflix reportedly offered some subscribers a “finale surprise” where they could opt-in to receive up to 10 DVDs selected at random from their queue.

McEvoy, who already subscribes to Disney+, Hulu, the Criterion channel and Mubi, said he’s now testing out other services such as Eros (Indian cinema) and Viki (Korean and Chinese films) for harder-to-find content. Still, he said, he’s “sad” to see Netflix’s DVD service depart.

“I absolutely would not have been able to find all of those movies [I’ve watched] if not for the Netflix DVD service,” he said.


The-CNN-Wire™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

KSL 5 TV Live

National News

Passengers check in at San Francisco International Airport on May 24, 2024 in San Francisco, Califo...

Rebekah Riess, CNN

TSA sets new record Friday for most travelers screened in a single day

The Transportation Security Administration (TSA) announced that it set a new record for most travelers screened in a single day on Friday, according to a post from the agency on X, formerly known as Twitter.

16 hours ago

President Joe Biden at the US Military Academy commencement ceremony in West Point, New York, on Ma...

Aileen Graef, Athena Jones and Shania Shelton, CNN

Biden touts expansion of NATO and actions in the Middle East during West Point commencement

President Joe Biden touted the expansion of NATO, his actions in the Middle East and progress in lowering military sexual assaults in a commencement address to the West Point graduating class Saturday.

20 hours ago

FILE - Boeing's Starliner capsule atop an Atlas V rocket is seen at Space Launch Complex 41 at the ...

Marcia Dunn, The Associated Press

Boeing’s 1st astronaut flight now set for June after a review of small leak on new capsule

Boeing is now aiming for its first astronaut launch at the beginning of June, after spending the past few weeks struggling with more problems on the space capsule.

21 hours ago

$20 bills...

Hannah Schoenbaum Associated Press

Utah man declined $100K offer to travel to Congo on ‘security job’ that was covert coup attempt

The friend of a prominent Congolese opposition leader’s son said he turned down a six-figure offer to travel there from the U.S. as part of the family’s security detail in what turned out to be a failed coup attempt.

22 hours ago

Local police have warned residents to keep their pets inside and not to approach the animal. (Tiffa...

Rebekah Riess and Zoe Sottile, CNN

A pet primate is on the loose in South Carolina

South Carolina authorities are searching not for a fugitive prisoner or a stolen vehicle, but rather for a resident’s wayward primate

23 hours ago

Colorado State Capitol Building, partially obscured by trees, on East Colfax Avenue in Denver, Colo...

Jesse Bedayn, Associated Press/Report for America

Colorado governor signs bills regulating funeral homes after discovery of 190 rotting bodies

Colorado Gov. Jared Polis signed two bills into law Friday that overhaul state oversight of the funeral home industry after a series of gruesome discoveries, including 190 discomposing bodies in a facility, families being sent fake ashes and the unauthorized sale of body parts.

24 hours ago

Sponsored Articles

Electrician repairing ceiling fan with lamps indoors...

Lighting Design

Stay cool this summer with ceiling fans

When used correctly, ceiling fans help circulate cool and warm air. They can also help you save on utilities.

Side view at diverse group of children sitting in row at school classroom and using laptops...

PC Laptops

5 Internet Safety Tips for Kids

Read these tips about internet safety for kids so that your children can use this tool for learning and discovery in positive ways.

Women hold card for scanning key card to access Photocopier Security system concept...

Les Olson

Why Printer Security Should Be Top of Mind for Your Business

Connected printers have vulnerable endpoints that are an easy target for cyber thieves. Protect your business with these tips.

Modern chandelier hanging from a white slanted ceiling with windows in the backgruond...

Lighting Design

Light Up Your Home With These Top Lighting Trends for 2024

Check out the latest lighting design trends for 2024 and tips on how you can incorporate them into your home.

Technician woman fixing hardware of desktop computer. Close up....

PC Laptops

Tips for Hassle-Free Computer Repairs

Experiencing a glitch in your computer can be frustrating, but with these tips you can have your computer repaired without the stress.

Close up of finger on keyboard button with number 11 logo...

PC Laptops

7 Reasons Why You Should Upgrade Your Laptop to Windows 11

Explore the benefits of upgrading to Windows 11 for a smoother, more secure, and feature-packed computing experience.

Netflix shutters its DVD rental business, marking the end of the red envelope era