Netflix nights still come wrapped in red and white envelopes

SANTA CRUZ, Calif. (AP) — Netflix’s pioneering DVD-by-mail rental service has been relegated as a holdover in the age of video streaming, but there’s still a steady — albeit shrinking — audience of diehards like Amanda Konkle who thankfully are paying to receive those discs in the iconic red and white envelopes.

“When you open your mailbox, it’s still something you actually want rather than just bills,” says Konkle, a Savannah, Georgia resident who has subscribed to Netflix’s DVD-by-mail service since 2005.

It’s a small pleasure that Konkle and other still devoted DVD subscribers enjoy, but it’s not clear for how much longer. Netflix declined to comment on this story, but at a media event in 2018Netflix co-founder and co-CEO Reed Hastings suggested the DVD-by-mail service could close around 2023.

When — not if — it happens, Netflix will discontinue a service that has shipped more than 5 billion discs in the US since its inception nearly a quarter of a century ago. And it will mirror the demise of the thousands of Blockbuster video rental stores that closed because they couldn’t counter the threat of Netflix’s DVD-by-mail alternative.

The eventual demise of the DVD-by-mail service was inevitable since Hastings decided in 2011 to spin it off from a then-nascent video streaming service. was so universally ridiculed that it was satirized on “Saturday Night Live.” It eventually settled on its current, more prosaic handle, The operation is now based in a nondescript office in Fremont, California, about 20 miles from Netflix’s tight campus in Los Gatos, California.

Shortly before the breakup of video streaming, the DVD-by-mail service had more than 16 million subscribers, a number that has now dwindled to an estimated 1.5 million subscribers, all in the US, based on calculations based on the limited disclosures of Netflix on the service in its quarterly reports. Netflix’s video streaming service now has 223 million subscribers worldwide, including 74 million in the US and Canada.

“The DVD-by-mail business left behind the Netflix that everyone now knows and watches,” Marc Randolph, the original CEO of Netflix, said during an interview at a coffee shop across the street from the post office in Santa Cruz, California.

The 110-year-old post office has become a landmark in Silicon Valley history because Randolph sent a Patsy Cline CD to Hastings here in 1997 to test whether a disc could be delivered undamaged through the US Postal Service.

The disc arrived at Hastings’ home unscathed, prompting the duo in 1998 to launch a DVD rental by mail website that they always knew would be replaced by even more convenient technology.

“It was planned obsolescence, but we were betting it would last longer than most people thought at the time,” Randolph said.

With Netflix’s successful streaming service, it might be easy to assume that anyone who still pays to receive DVDs in the mail is a technophobe or someone who lives in a remote part of the US without reliable internet access. But subscribers say they’re sticking with the service so they can rent movies that are otherwise hard to find on streaming services.

For Michael Fusco, 35, that includes the 1986 movie “Power” starring a then-young Richard Gere and Denzel Washington, and the 1980s “The Big Red One” starring Lee Marvin. That’s one of the main reasons why he’s been subscribing to the DVD-by service since 2006, when he was just a freshman in college, and he’s not about to cancel it now.

“I’ve been getting it for almost half my life, and it’s been a big part,” Fusco said. “When I was young, it helped me discover voices I probably wouldn’t have heard. I still have memories of getting movies and them blowing my mind.

Tabetha Neumann is one of the subscribers who rediscovered the DVD service during the 2020 pandemic lockdowns after running out of things to watch on her video streaming service. So she and her husband signed back in for the first time since canceling in 2011. Now they like it so much they get a subscription that lets them keep up to three drives at a time, an option that currently costs $20 a month. (compared to $10 per month for the single-disc plan).

“Once we started watching all the movies we wanted to see, we realized it was cheaper than paying $5 a movie on some streaming services,” Neumann said. “Plus, we found a lot of old horror movies, and that genre isn’t really big in terms of streaming.”

Konkle, who has written a book about Marilyn Monroe’s movies, says she still finds movies on the DVD service, such as the 1954 movie “Cattle Queen of Montana,” which featured future US President Ronald Reagan alongside Barbara Stanwyck and the French film “Sugar Cane Alley” — which helped her teach her film studies classes as an associate professor at Georgia Southern University. It’s a viewing habit she usually doesn’t share with her classes because “most of my students don’t know what a DVD is,” Konkle, 40, said with a laugh.

But for all the attractions of the DVD service, subscribers are beginning to notice signs of deterioration as the company has shrunk from annual sales of more than $1 billion a year ago to a figure likely to be below $200 million this year. revenue will decline.

Katie Cardinale, a subscriber who lives in Hopedale, Massachusetts, says she now has to wait two to four days for the discs to arrive in the mail because they ship from a distribution center in New Jersey instead of Boston. (Netflix does not disclose how many DVD distribution centers are still operating, but there were once about 50 in the US).

Konkle says there are now more discs with cracks or other defects and it takes “an eternity” to get them replaced. And almost all subscribers have noticed that the selection of DVD titles has shrunk dramatically from the service’s peak years, when Netflix boasted that it had more than 100,000 different movies and TV shows on disc.

Netflix no longer discloses the size of its DVD library, but the subscribers interviewed by the AP all reported that the narrowing of the selection makes it more difficult to find famous movies and popular TV series that were once routinely available on the service. Instead, Netflix now sorts requests for titles such as the first season of the award-winning “Ted Lasso” series – a release available for purchase on DVD – into a “saved” queue, indicating that it may decide to release it in the future. store , depending on demand.

Knowing the end is in sight, Randolph said he will mourn the death of the DVD service he brought to life as he takes comfort in the legacy that will endure.

“Netflix’s DVD business was an essential part of who Netflix was and still is,” he said. “It’s in the company’s DNA.”

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