Netflix hasn’t forgotten about its 4.3 million DVD subscribers

Published January 4, 2017 by lagmen
Netflix DVDs

Yes, Netflix still has a DVD rental service. And millions of people subscribe to it.

It’s easy to forget those iconic red envelopes that come bearing DVDs and Blu-rays considering Netflix spun the business off into a separate website—DVD.com—in 2012 and bills customers for it independently of the streaming product. But the Los Gatos, California-based streaming service hasn’t forgotten about the DVD-by-mail operation it was built on.

The company is touting a new app that DVD customers can use to manage their Netflix queues, search for DVD and Blu-ray titles, and get movie recommendations. Those features for DVD subscribers vanished from the main Netflix app back in 2011, leaving subscribers to manage their accounts on DVD.com. (Which came after Netflix made the ill-fated decision to spin off its DVD service into a separate company called Qwikster; it was forced to backtrack after customer outrage.)

The new app, called DVD Netflix, is currently only available on Apple’s iOS in the US, which is the only country the DVD service is offered in.

Netflix has been relatively quiet about innovations on the DVD front lately, in stark contrast to its approach to streaming. There, it has invested a lot to bulk up the business—expanding streaming to most corners of the world, investing $6 billion in content this year, and building out half of the catalog with originals.

The new app suggests that the company could be placing a renewed focus on its mail-order business, or at least trying to slow the bleeding of subscribers abandoning the service.

Netflix’s DVD subscriber base has thinned steadily over the past year. It dropped to 4.3 million during the third quarter of last year, down from 5 million subscribers in the same period in the previous year. By way of comparison, the streaming business had about 47.5 million subscribers in the US and 86.7 million globally.

The New York Times reported (paywall) last year that Netflix engineers have been working behind the scenes to strengthen customer service and find more efficient ways to process the millions of DVDs that are returned, sorted, and shipped each week. The company reportedly has no plans to shutter the business.

“If you cut back on service, you are going to lose your subscriber base,” Hank Breeggemann, general manager of Netflix’s DVD division, told the publication. “Expect us to continue to ship DVDs for the foreseeable future.”

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