Most of Netflix’s 238 million streaming customers around the world will be unaware that the company first launched 25 years ago as a DVD mailing service. Even fewer might realise that operation has continued, with under 1 million people still subscribing.
But now the company is finally hitting the stop button, with its five remaining US distribution centres mailing out their final discs to American customers on Friday.
These DVD diehards will be allowed to keep these titles rather than return them, meaning some will get up to 10 as a goodbye present from a business that boasted as many as 16 million subscribers at its peak.
“It is very bittersweet,” Marc Randolph, Netflix’s co-founder and the chief executive when the company shipped its first DVD, told Associated Press. “We knew this day was coming, but the miraculous thing is that it didn’t come 15 years ago.”
Netflix does not break out the number of DVD subscribers in its figures, but according to an AP estimate fewer than 1 million people now subscribe to the service.
Randolph came up with the idea of a DVD-by-post service in 1997 – in a challenge to then rental market leader Blockbuster – with his friend and fellow entrepreneur, Reed Hastings, who eventually succeeded Randolph as CEO. He only stepped aside from that role this year.
The first disc sent out by Netflix was Tim Burton’s Beetlejuice in March 1998 and since then the company has shipped 5.2bn of them. Its most popular title was the Sandra Bullock vehicle The Blind Side.
However, Randolph said he knew that DVDs would not be the mainstay of the business and would be overtaken by watching films and TV shows through internet connections.
In 2011 Netflix decided to separate the DVD business from the streaming business, one year after Blockbuster went bankrupt – having turned down an opportunity in 2000 to buy Netflix for $50m (£41m) instead of trying to compete against it. The streaming giant is now worth about $166bn.
“From day one, we knew DVDs would go away, that this was transitory step,” Randolph said. “And the DVD service did that job miraculously well. It was like an unsung booster rocket that got Netflix into orbit and then dropped back to Earth after 25 years. That’s pretty impressive.”
