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tiffanyh

To support your point …

Just 3-years ago, the DVD business was generating $200M in revenue.

Today, it’s only $120m.

That means total revenues are down 66% in just 3-years.

You can’t fault Netflix for wanting to divest a business that is rapidly declining.

And that doesn’t even speak to the profitably of that business unit which is fair to assume to be losing money when you have such rapid revenue decline.

https://www.mediaplaynews.com/netflix-indifference-to-disc-r...

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It's not a natural death. They've done nothing to maintain it. They reduced distribution centres (thus increasing wait times) and they haven't replaced many of the titles that have become damaged, so they are unavailable. It's no wonder people are leaving in large rates, because what they used to offer was unparalleled access to films and TV. 100k titles. No streamer has that.

Companies have a finite amount of money.

If the DVD and Blu-ray rental userbase is dropping, I could cut that division's budget in half and move it to another division that is generating much stronger traction (eg. Netflix Korea and their KDrama acquisitions making Netflix a market leader in Asia).

The TAM of the DVD/Blu-Ray rental market has fallen, so as a company, it's best for me to fire those customers - either by slowly degrading the service so they change to the mainstream service, or deprecating the entire service.

> 100k titles. No streamer has that.

But

1. Do does a large enough userbase actually want that?

2. Can that large enough userbase spend enough margins on that service to generate a healthy profit?

3. Are my operating costs for that division rising faster than the revenue from that division?

If all 3 of those answers aren't satisfactory, you end up shutting down an initiative.

Also, there's always FMovies or Pirating for those who really really want it.

It's a chicken and egg argument, we don't have access to the internal metrics to really know which came first, sliding users or diversion of resources to quietly kill the project.

No, it's really not. DVD sales are way down, DVD player sales are down, many young people have never touched a DVD.

I'm not particularly shocked dedicated player sales are down given how ubiquitous DVD players are in basically everything (laptops, desktops and game consoles) and how long they last. Also that doesn't really answer how that trend was spooling out to the mail order rental business over the recent past, people have been using streaming a lot for ages but the business still made sense to keep going before so what in the near term finally made the lines cross?

I haven't seen a DVD drive in a computer I have bought in almost 10 years.

I only see one today in the PS5 and Xbox Series X, and from the recent Xbox leak it looks like that's going away.

Off the top of my head, the costs of logistics has skyrocketed since COVID due to staffing shortages and Teamster Union actions/strikes.

Have costs actually increased for the kind of small packages Netflix is sending disks in? The rate for large shipments by the container load have fallen back to around their pre pandemic levels from what I'm seeing in a quick search. That's not really relevant to the kind of shipping costs Netflix would be seeing for it's disk service though but I'm not really finding a chart tracking that.

https://www.statista.com/statistics/1250636/global-container...

Ok, but my point is you can't just claim the revenue is shrinking as evidence there was no demand when the service itself is getting worse. Perhaps that alone explains most of the reduction. People using the disc service in 2020 had ample time to move to streaming so clearly there was something about the disc service that they found worthwhile.

> revenue is shrinking as evidence there was no demand

Revenue shrinking means there isn't monetary demand. Consistent YoY shrinkage is enough reason to shut down an initiative.

Brownie point initiatives only make sense during a low interest rate environment. If revenue is dropping significantly with no foreseeable market growth, that money can be better deployed in other growth opportunities, or kept in a bank, or given back to investors via stock buybacks or dividends to ensure stronger investor relations and higher valuations.

If you feel there is actual market demand that can be satiated, feel free to build your own alternative. Maybe the economics work for you. This is a forum maintained by YCombinator...

I can't watch DVDs in most of the places I want to consume media any more, and that's increasingly common. Other DVD suppliers are also seeing a big drop in revenue, not just Netflix.

Can you even get a 15" laptop with a dvd drive these days?

It's 17", not 15", but I recently bought one of these

https://junocomputers.com/product/nyx-17-v3/

for watching DVDs.

Oh sweet it also has a VGA output.

You can get an external blu ray drive powered off the USB connection for not much, maybe $50 but I haven't checked recently. I was recently in a vacation rental and easily plugged my laptop via HDMI cable to the large screen TV, worked great for watching disc-based movies.

Yup. People fail to realize that the question is not "can I use $100 to run a business that will generate $140 of profit over 7 years", but "in 7 years, what gives me the most return for my $100".

It has been a decade since I owned a computer with a dvd drive and similarly long since I had to use a dvd at all, and I'm much more of a techie than the average person.

The simple fact is that most people by now don't even have the means to play dvds.

You say you're more of a techie than the average person, so it follows that you have no use for a DVD drive. What about the millions of other people that have had a perfectly fine DVD player in their homes for several years?

It isn't just DVD players. I've never purchased a standalone player, it came built in on my Playstation. It's only in the most modern generation of consoles that you have a choice to buy a disc drive-less version.

The counter point to that is that DVDs look terrible on modern 60" TVs. You don't have to be a techie to have one of those. Even my 93 year old grandmother has one.

Movies and TV shows before 2008 weren't commercially available in resolution above DVD quality, unless special efforts were made to upscale and re-release them.

"Upscale" is the wrong word here. The film is scanned at a higher resolution. If it was shot on tape then yes it has to be upscaled but almost no films were shot on tape.

By more of a techie, I mean to say that I am capable of buying an external reader and dealing with many more hurdles if needed to get something done (eg to read a dvd). So not having a built-in drive would've been less of a hurdle for me, if I had needed to read a dvd.

I have never been a TV console gamer (always been a handheld person), so I concede that point.

I don't think the Netflix DVD customer base is on the go all that much. If anything I would guess they are the segment most likely to still have a cable TV subscription, and do all their media watching at home on a TV.

Being a "techie" is irrelevant. It is straightforward to get a disc player if someone wants it. You clearly don't want it. But if someone does, the lack of tech knowledge is barely a barrier. I would guess people that are less tech savvy are more likely to still use discs to be honest.

I was pointing to being a 'techie' because in my experience, with non-techies, it isn't that obvious to just buy a reader/player.

My parents for instance were surprised to learn that the reader didn't need to be built into the laptop and could be a separate usb thing. They just figured that they'd need to pay for a service to get the discs converted to files on a flash drive similar to how they had previously done for taped videos rather than thinking that they can just buy a reader.

How do you maintain distribution centers with a rapidly declining customer base? Distribution centers closed because customers canceled their subscriptions.

Streamers do have unparalleled access to films and TV. Instantly. No waiting for DVDs that are out of stock.

Ignore the fact that streaming costs more. Why does that matter? It’s a better product.

Spotify disrupted a free product in pirated music.

Price is not the only consideration when it comes to product choice.

The US alone has almost a half a million active streaming service subscriptions. Netflix DVD has 1/500th of that subscriber base.

Apologies but I feel lile this is quite an important distinction to make:

> down 66%

down to 66%.

"down X" suggests/implies down by X.

also it’s 60%, not 66% like they said

and yet companies can make a successful business out of vinyl, and even cassette tapes - just not at the scale that Netflix demands. This is the OP's point I think.

My brother in Christ, that is down 40%.

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