Before Netflix announced that it would discontinue its DVD-rental service earlier this week, many of its customers might not have known that it was how the company began in 1997. The demise of that side of the business might not elicit the same reaction as the closure of the last Blockbuster video-rental shop but it’s still a significant moment for some.
Admittedly, the decision makes business sense. The DVD-by-post operation reportedly made up about 0.4 per cent of Netflix’s revenues last year. Even at its 2010 peak, the DVD-subscription service reached “only” 20 million customers, a fraction of the company’s 232 million users today. At a time when the streaming behemoth is having to devise novel strategies to end a lull in new customer sign-ups – including cracking down on password sharing, introducing a cheaper, ad-supported plan, trying out live broadcasting and expanding into new markets – it’s only natural to shed what is not essential.
So is the death of the DVD imminent? I’m not so sure. While waiting days for a disc to be delivered to your letter box might seem anachronistic, there are still advantages to having films in a physical format. Among them is a sense of commitment: you’re less likely to bail on a title that you have specifically bought (and sits on your coffee table, reminding you of its existence).
Then there’s choice. Multiplying streaming services, all vying for rights to different titles, means ballooning subscription bills. Two years ago I reported on a DVD-rental service called Cinema Paradiso. Though it’s a niche player, it has a 100,000-strong film catalogue – bigger than those of Netflix or Amazon Prime. Perhaps, like Giuseppe Tornatore’s film of the same name, this company will end up being an elegy to the magic of old-school movie-watching. For Netflix, though, the future isn’t about nostalgia.
Chiara Rimella is Monocle’s executive editor. For more opinion, analysis and insight, subscribe to Monocle today.