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File - Mei Michelson prepares to watch a Netflix DVD at her home in Palo Alto, Calif., on Oct. 22, 2007. The Netflix DVD-by-service will mail out its final discs Friday from its five remaining distribution centers, ending its 25-year history. (AP Photo/Paul Sakuma, File)
Some of the remaining DVD diehards will get up to 10 discs as a going away present to loyal customers such as Konkle, 41, who has watched more than 900 titles since signing up for the service in 2006. In hopes of being picked for the 10 DVD giveaway, Konkle set up her queue to highlight for more movies starring Brando and older films that are difficult to find on streaming.
At its peak, the DVD boasted more than 20 million subscribers who could choose from more than 100,000 titles stocked in the Netflix library. But in 2011, Netflix made the pivotal decision to separate the DVD side business from a streaming business that now boasts 238 million worldwide subscribers and generated $31.5 billion in revenue year.
The DVD service, in contrast, brought in just $146 million in revenue last year, making its eventual closure inevitable against a backdrop of stiffening competition in video streaming that has forced Netflix to whittle expenses to boost its profits.
Netflix ended March with 232.5 million worldwide subscribers to its video streaming service, but it stopped disclosing how many people still pay for DVD-by-mail delivery years ago as that part of its business steadily shrank. The DVD service generated $145.7 million in revenue last year, which translated into somewhere between 1.1 million and 1.3 million subscribers, based on the average prices paid by customers.
The growth of Netflix's video streaming service has been slowing down over the past year, prompting management to put more emphasis on boosting profits. That focus may have also contributed to the decision to close an operation that was becoming a financial drain.
Shortly before Netflix broke it off from video streaming in 2011, the DVD-by-mail service boasted more than 16 million subscribers. That number has steadily dwindled and the service's eventual demise became apparent as the idea of waiting for the U.S. Postal Service to deliver entertainment became woefully outdated.
But the DVD-by-mail service still has die-hard fans who continue to subscribe because they treasure finding obscure movies that are aren't widely available on video streaming. Many subscribers still wax nostalgic about opening their mailbox and seeing the familiar red-and-white envelopes awaiting them instead of junk mail and a stack of bills.
The service's history dates back to 1997 when Netflix co-founder Marc Randolph went to a post office in Santa Cruz, California, to mail a Patsy Cline compact disc to his friend and fellow co-founder Reed Hastings. Randolph, Netflix's original CEO, wanted to test whether a disc could be delivered through the U.S. Postal Service without being damaged, hoping eventually to do the same thing with the still-new format that became the DVD.
The Patsy Cline CD arrived at Hastings' home unblemished, prompting the duo in 1998 to launch a DVD-by-mail rental website that they always knew would be supplanted by even more convenient technology.
"It was planned obsolescence, but our bet was that it would take longer for it to happen than most people thought at the time," Randolph said in an interview with The Associated Press last year across the street from the Santa Cruz post office where he mailed the Patsy Cline CD. Hastings replaced Randolph as Netflix's CEO a few years after its inception, a job he didn't relinquish until stepping down in January.
Even subscribers who remain loyal to the DVD service could see the end coming as they noticed the shrinking selection in a library that once boasted more than 100,000 titles. Some customers also have reported having to wait longer for discs to be delivered as Netflix closed dozens of DVD distribution centers with the shift to streaming.
okay so recently i was logging into netflix, but it said my password was wrong and i went to go reset it with my icloud email, but no matter how many times i try i just won't get ANY emails from netflix. i get emails from every other sender, just not netflix. i went to go see if i blocked netflix in my icloud email settings, but there was nothing there. can anyone help?
Since Netflix is the only sender you are not able to receive emails from, it looks like it is an issue with Netflix, not with your email account itself. You will need to contact Netflix for more assistance on getting into your account. Here is How to contact an app developer
Two weeks ago, I wrote about Netflix's announced plan to end its DVD rental business. After 25 years, the last day the red envelopes will be mailed out is Sept. 29. Returns will be accepted through Oct. 27.
If you're a Netflix member, you'll soon be getting an email from the company about your viewing history. I received it recently, and it said that the company "anticipated that our members would appreciate a way to download their DVD Netflix history. This personalized PDF contains your queue, rental history, ratings and reviews."
The list can be easily downloaded from Netflix by just a click on the email's box, and titles are arranged by dates shipped. Movies that have been rated by the user are listed separated by the number of stars given. I only rated about 25% of mine.
"We estimate the likelihood that you will watch a particular title in our catalog based on a number of factors," a Netflix spokesman said. "It's based on one's viewing history and ratings, information on titles including categories, actors and release year, and how long you watched."
If you haven't gotten the email yet, you can review your DVD history by logging on to your account at the Netflix DVD site (www.dvd.com). Click on the profile icon, and then on "account." Scroll down and click on "DVD Rental Activity."
In 1998, Reed Hastings and Marc Randolph launched Netflix as an online DVD rental service. They believed this to be the right business model for where Internet bandwidth was at that time. According to Netflix, the first DVD it shipped on March 10th, 1998 was Beetlejuice. Since then, the company has shipped over 5.2 billion DVDs.
Yet, from the start, the founders had a vision of transforming Netflix into a video streaming platform. In the early days, Netflix invested up to 2% of its revenues to develop its streaming service and waited for the moment when increasing internet bandwidth made its service sustainable.
Netflix first announced that it would be shutting down its DVD-by-mail service in April. This makes the business model shift 100% complete. With this shutdown, Netflix has totally moved away from the business model that launched its success.
This is a remarkable example of being an invincible company. Very few companies can execute a successful shift from one business model to another and become a more valuable company in the process. But those companies that can do it well are more likely to survive and thrive for decades.
This is a wonderful way for Netflix to delight its customers, while it is shutting down the service. It also solves a problem for Netflix - how to deal with warehouses that have lots of DVDs that will become obsolete after September.
To the lucky people that will receive these DVDs and the red envelopes - please hold on to them and look after them well. They will become valuable nostalgic keepsakes for those of us who have a keen interest in the historical evolution of business models.
Tendayi Viki is an author and innovation consultant. He holds a PhD in Psychology and an MBA. As Associate Partner at Strategyzer, he helps large organizations innovate for the future while managing their core business.
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