Netflix is finally bidding its last ‘adieu’ to its infamous red envelope, after 25 years of mailing DVDs to its clients. While the news of the end of an era broke last April, this week Netflix will officially put an end to the practise, which put them on the map before it started its streaming service.
In an emotional message on LinkedIn, Co-Founder Marc Randolph shared the first ever shipment for their DVD rental, shipped to himself. On April 14th 1998, he said, a dozen employees working out of an old bank “with [a] dirty green carpet” mailed out the first Netflix DVD, and “later this week, a similar size team will mail the last.”
Netflix’s original selling point, in 1998, was to be an alternative to video-rental stores. To be more exact, Netflix aimed at facilitating the customer’s experience by ordering a movie and receiving it directly at home without the need to browse in actual stores. And as time went by, the company had the innovative idea to launch streaming services, leading to the slow death of video-rental stores, including in Malta.
Mr Randolph wrote that as the years went by, Netflix accomplished things that he never imagined possible. “We disrupted an industry, brought down Blockbuster, launched the streaming era, completely changed the way the world consumes video content and reshaped the way movies and television are produced.”
He added that when they initially started out, the founders planned to “limp along” with a DVD-rental-by-mail service for four or five years. “Long enough for us to lay a foundation for our inevitable move into streaming. But to the surprise of almost everyone – including us – that crazy DVD-rental-by-mail idea not only worked but lasted for 25 remarkable years.”
In recent years, Netflix’s subscriber count has been on rocky grounds, with subscribers reaching a peak during the pandemic and then experiencing their first decrease in a decade shortly after. Despite losing almost 1.2 million subscribers in the first half of 2022, the entertainment giants reported 1.75 million subscribers and a profit of $1.31 (€1.08) billion in the first half of 2023.
One of Netflix’s biggest drawbacks in subscriber count and profit, was password sharing between subscribers and non-subscribers. Despite the strong opposition by its customer base, Netflix put an end to the password sharing practice, which it originally endorsed. Back in 2017, Netflix tweeted that “love is sharing a password.”
Since then, competition grew with DisneyPlus attracting many customers and Netflix put its foot down and implemented, what was described as, “password-sharing crackdown.” By the end of July, Netflix set to ensuring that any subscriber whose account is logged into devices from other households would incur extra fees. Nonetheless it had also introduced a new “affordable” plan for the price of $7 for streaming with advert intermissions. This plan attracted many users, amounting to 23 per cent of new user sign up in July. Overall, Netflix managed to gain an additional 5.9 million new paid subscribers between the periods of April and June of 2023.
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