Netflix will mail its last DVDs this week in the company’s signature red envelopes — finally putting an end to the original business that jumpstarted the streaming behemoth 25 years ago.
The Los Gatos, Calif, company, which began mailing DVDs in 1998 — the first movie shipped was “Beetlejuice” in a salvo against entrenched retail giant Blockbuster Video — made the announcement in April.
Netflix — which has since become a $170 billion company with Blockbuster filing for bankruptcy more than a decade ago — plans to shutter its DVD division on Friday.
“It’s sad when you get to the end, because it’s been a big part of all of our lives for so long,” Hank Breeggemann, the general manager of Netflix’s DVD division told The New York Times. “But everything runs its cycle. We had a great 25-year run and changed the entertainment industry, the way people viewed movies at home.”
The publication penned an extensive feature on the DVD business and its main distribution plant in Anaheim, Calif., where the facility once processed 1.2 million DVDs a week and employed 50 people, generating millions of dollars.
Now, the plant has just six employees left, as Netflix’s DVD business has shriveled in the face of its booming streaming business.
Netflix was the brainchild of Reed Hastings and Marc Randolph, two businessmen who wanted to disrupt the DVD rental business by eliminating due dates, late fees and monthly rental limits.
Netflix grew quickly, squashing competitors like Blockbuster.
According to The Times, at its height, Netflix was the Postal Service’s fifth-largest customer, operating 58 shipping facilities and 128 shuttle locations that allowed Netflix to serve 98.5 percent of its customer base with one-day delivery.
Aside from the Anaheim plant, there are five other facilities in Fremont, Calif., Trenton, NJ, Dallas and Duluth, Ga. Revenue has shrunk to $60 million for the first half of 2023, a fraction of Netflix’s $6.5 billion in US streaming revenue for the same period.
Netflix launched its streaming service in 2007 under Hastings, who grabbed the reins of CEO from Randolph in 1999.
Hastings quickly expanded the streaming business through licensing and the creation of original series like “House of Cards” and “Stranger Things.”
Earlier this year, Hastings moved to the role of executive chairman, leaving Ted Sarandos and Greg Peters to run the company as co-CEOs.
Although DVDs are no longer the focus of the business, Netflix still gets requests and sends some 50,000 discs a week for blockbusters like “Avatar: The Way of Water” and “The Fabelmans,” as well as more obscure flicks like Catherine Deneuve’s 1998 crime thriller, “Place Vendôme.”
The Times said abut 100 longtime employees work on the DVD division, and most of them will leave the company this week.
It’s not just the employees who will miss the unit, so will its loyal customers, which total roughly one million.
Bean Porter, a St. Charles, Ill. resident, said she was “devastated” when she heard the news about the end of the DVD service.
She told The Times she preferred to subscribe to watch DVDs of shows like “Yellowstone” and “The Handmaid’s Tale” — episodic TV made for other streaming services that would have required her to buy additional subscriptions.
To quell the outrage of Porter and other customers, Netflix is allowing its DVD customers to hold on to their final rentals.
“I’m pretty angry,” Porter said. “I’m just going to have to do streaming, and I feel like what they’re doing is forcing me into having less options.”
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