Will Netflix End Dvd Service In Favor Of Streaming

Netflix (NFLX 0.92%) may be the summit streaming giant in the world, with 140 1000000 paying subscribers, only before it was an online content powerhouse, information technology was a simple DVD-by-mail rental service. And to some people -- it withal is.

Yous might remember Netflix would have phased out the DVD rental service over the 12 years since information technology launched its pop streaming service in 2007. However, Netflix has kept the DVD rental business going, and it'due south still profitable.

Netflix's homepage for its DVD subscription plans.

Netflix'south DVD partition has its own headquarters in Los Gatos, California. Epitome source: Netflix.

A dwindling group of DVD subscribers

Past 2006, Netflix had racked up 6.2 million DVD-by-mail subscribers. The next twelvemonth, it launched its pop online video service to supplement its original DVD service. The company didn't first offer an online-only subscription plan until November 2010, when it had most 20 meg subscribers. Ever since, DVD-only subscribers have been dwindling. And at present, nine years later, it has only ii.seven million DVD subscribers in the U.S., downwards from 3.3 million in the same period final twelvemonth.

This past quarter, Netflix's domestic DVD segmentation reported revenue of $85 million with a turn a profit of $51.5 million, down from a $62.7 one thousand thousand profit a year ago. When you consider Netflix's overall revenue of $iv.2 billion, this division is obviously minor potatoes, simply obviously Netflix doesn't desire to cut it as long equally it's making coin.

Check out the latest Netflix earnings call transcript.

Netflix actually separate its DVD service off from its streaming service dorsum in 2011 and it now operates under its ain website, dvd.netflix.com. The business even has its ain management squad and headquarters in Los Gatos, California. In its heyday, Netflix operated fifty DVD shipment centers in the U.Due south.; now information technology has just 17, according to CNBC.

Today, the standard DVD programme is $vii.99 a month and gives you unlimited rentals, only yous tin have only one disc rented out at a time. With the $xi.99 premier plan, you can have two discs rented out at a time. There's also an Hd Blu-ray DVD option, with a $ix.99 standard plan and $14.99 premier programme. For all iv plans, at that place are no tardily fees. (Legend has it Netflix was started afterward now-CEO Reed Hastings was charged a big belatedly fee to return a video.) These prices are slightly cheaper than Netflix's streaming plans, which range from $8.99 to $15.99 a month following the January 2019 toll increase.

Why do people still use the Netflix DVD-by-mail option?

While 2.vii million subscribers are a far cry from Netflix'southward nearly 140 meg streaming subscribers, that'southward all the same a surprising number of people who are willing to wait for a DVD to arrive past postal service. Simply there are a few benefits to the service.

First, at that place are most 100,000 DVD options, versus about 6,000 TV shows and films available on Netflix'southward streaming service. Second, new releases are typically available on DVD quicker than past streaming; a lot of times, new titles don't ever brand it to the streaming site, hence the more limited options. And third, some customers are merely in spotty Wi-Fi areas and would prefer to have a smoother viewing experience by using DVDs instead.

How much longer will Netflix offer DVD subscriptions?

The curt answer is that Netflix volition probably keep its DVD operations running equally long every bit they still make the company a trivial extra money. While the segmentation made about $l one thousand thousand last quarter, that's $10 million less than the same period just ane twelvemonth ago. At this rate, it seems like it might have another three years left at the most. However, Netflix said in the past that it plans to go on it running until at least 2025, a former employee told CNBC.

So while DVDs might seem to be obsolete, Netflix's profitable DVD business proves that there are still a number of people who prefer to proceed things quondam school. And with about 100,000 titles to choose from, it's understandable why some believe the service is a better deal than the streaming plans. So if you're feeling nostalgic and patient, maybe it's time to dust off your DVD role player.