Netflix is shutting down its DVD business after 25 years
The company plans to end the operation later this year as part of its on-going downsizing.
Netflix Inc. is planning to close its DVD business in 25 years.
Los Gatos will ship its last DVDs on Sept. 29, 2023, closing down the core business that gave birth to the company and laid the foundation for it to build an empire of streaming. Netflix's earnings report on Tuesday stated that the DVD business has seen its customer base shrink and it can no longer offer the best service to those subscribers.
According to the earnings report, "Our members have always loved the control and choice that direct-to consumer entertainment offers, including our wide range of titles and ability to binge-watch entire series." "DVD opened the door for streaming. We can continue to do many of the things we started long after DVD."
The DVD business revenue declined from $911 millions in 2013 to $146 in 2022, while the streaming industry generated $31.5 billion in 2020 compared to $3.4 billion.
Netflix had planned more than a decade before to separate its DVD-by mail operation from their streaming service. The DVD service would have been called Qwickster, and customers would have had to create separate accounts.
The decision was not popular with subscribers, and according to reports from the time, more than a million had left. Netflix abandoned its move and bundled both services together.
Netflix has not yet confirmed whether it will lay off employees locally or nationally as a result the closing of its DVD business. It operated a DVD Distribution Center near its headquarters at one time.
Netflix representatives who are familiar with the DVD business of Netflix were not available to comment immediately.
The streaming giant posted a profit of $1.3billion, or $2.88 per share, as opposed to $1.6billion, or $3.53 per share, during the same period last year. The company's revenue increased 4% to $8.2 Billion.
After Netflix's announcement, the Nasdaq stock (NFLX) dropped as much as 10 percent in after-hours trading before recovering. Recent trading saw them down $1.88 per share, or less that 1% to $331.82. The company's shares ended the regular session at $333.70, up 0.3%.