Many of Netflix’s 238 million streaming customers worldwide are unaware that the company started 25 years ago as a DVD rental-by-mail service.
Even fewer will know that the operation has continued, with nearly a million subscribers. But the company is finally going to end it, and the five distribution centers it has left in the U.S. will send their last discs to American customers on Friday.
These DVD enthusiasts can keep these titles instead of returning them, meaning some will receive up to 10 as a farewell gift from a company that once had 16 million subscribers at its peak.
Farewell to the Last Video Store
“It’s very bittersweet,” says Marc Randolph, co-founder of Netflix and CEO when the company sent out its first DVD. “We knew this day would come, but the miraculous part is that it didn’t come 15 years ago.”
Netflix doesn’t break out its DVD subscriber numbers in its figures, but according to an AP estimate, fewer than a million people are now subscribed to the service.
Randolph conceived the idea of a DVD-by-mail service in 1997 with his friend and fellow entrepreneur Reed Hastings, who eventually succeeded Randolph as CEO. Randolph stepped down from the role earlier this year.
Netflix’s first-ever mailed-out disc was Tim Burton’s Beetlejuice in March 1998, and since then, the company has distributed 5.2 billion DVDs. Their most popular title was Sandra Bullock’s The Blind Side.
However, Randolph knew that DVDs wouldn’t be the backbone of the business and would be overshadowed by streaming movies and TV shows through internet connections.
In 2011, Netflix decided to split the DVD business from streaming, a year after the bankruptcy of Blockbuster, which in 2000 rejected a buyout offer from Netflix for $50 million ($41 million euros). The streaming giant is now worth about $166 billion.
“From day one, we knew DVDs would go away, that it was a transitional step,” Randolph says. “And the DVD service did that miraculously well. It was like an anonymous booster rocket that put Netflix in orbit and then came back to Earth after 25 years.”
