A decade ago, getting the mail was exciting.
In addition to letters and trashy magazines addressed to your neighbor, the day’s delivery often included Netflix’s signature red DVD envelopes.
These days, streaming has supplanted the DVD-by-mail model. But the disc ain’t dead yet. Netflix is still shipping out envelopes through its DVD.com service.
Sure, we’re all about the binge
Competition between streaming services has changed the way we watch TV.
The big bucks are in creating broadly appealing new shows. A must-see series like “Little Fires Everywhere” or “Stranger Things” doesn’t just pull in subscribers.
Product placement deals can bring in $50k to $500k per episode, and owning original content means streaming services don’t have to negotiate for expensive distribution rights.
This makes it harder for a service to justify keeping movies in the lineup — especially rare films and classic cinema, which can be pricey to acquire and keep.
The number of movie titles available via streaming has sunk 40% since 2014, from ~6.5k to ~3.8k.
But there’s still a place for DVDs by mail
In addition to keeping film buffs happy, DVD.com also is a resource for people in areas with poor broadband access. And it’s surprisingly profitable.
- With 2m users, it made $37.3m in profits in the 4th quarter of 2019, which breaks down to $17.34/user.
- Netflix’s streaming service sees a return of $13.09/US subscriber.
There’s a concern that if DVD catalogs disappear, we will lose some titles forever.
Netflix isn’t as invested in pumping resources into DVDs as its streaming offerings, but some industry experts think that there might eventually be value in mining back catalogs to create new services centered on hard-to-find content.
Get the 5-minute roundup you’ll actually read in your inbox
Business and tech news in 5 minutes or less