Netflix sent its last red envelope as physical media becomes a collector’s item
Signed, sealed, delivered… it’s yours. Netflix licked its final red envelope last week, shuttering its once bustling DVD biz. In the pre-streaming era, Netflix mailed out enough discs to be USPS’s fifth-largest customer. Over 25 years, it shipped 5.2B+ DVDs to 40M subscribers — obliterating Blockbuster in the process. Now its red envelopes are going the way of Blockbuster’s laminated VHS boxes.
By the #s: This year, Netflix was sending out only about 50K DVDs/week, and red-envelope revenue was $60M through June — less than 1% of Netflix’s US streaming revenue over the same period.
Due date: none. The remaining 1M subscribers get to keep their final DVDs, like that Blockbuster copy of “The Lion King” you never returned, minus the guilt.
Physical media’s extinction event… Netflix isn’t the only company tossing physical media in the scrap heap. Disney stopped putting its content on DVDs in Australia in August. Apple’s MacBooks haven’t had CD drives for more than a decade. In the gaming industry, most of Microsoft’s new-gen Xbox consoles are the disc-less Series S, and a recent leak suggested plans for a disc-less console update. 72% of Sony’s PlayStation game sales are digital downloads. And barring a HitClips resurgence, streaming’ll continue to dominate the US music industry, where it accounts for 84% of total revenue.
Innovation can leave a lot behind… Netflix has about 4K movies available to stream — enough for a rainy weekend, but just 5% of the selection its DVD biz used to offer. Meanwhile, streamed content can be nixed by whoever hosts it. Warner Bros. pulled its hit show “Westworld” from Max, while Nintendo and Microsoft are shuttering digital storefronts for older gaming consoles — effectively ending the ability to buy some classic games. Critics of Netflix’s DVD move worry more content could be left behind.