In a blog post on Tuesday, streaming giant Netflix announced that it is phasing out its DVD-by-mail rental business, a service it has maintained for about 25 years.
The company said its DVD rental business has been shrinking and will not be able to continue to provide a quality service.
In a blog post, Netflix co-CEO Ted Sarandos said, “These iconic red mailer packages have changed the way people watch shows and movies at home, paving the way for a shift to streaming.”
In his autobiography, Netflix co-founder Marc Randolph describes how he and co-founder Reed Hastings came up with the idea of challenging Blockbuster Video with mail-order VHS tapes, but it was too costly. Instead, they found a more cost-effective proposition: selling and renting DVDs online.
The new generation of DVD players first went on sale in the US in 1997, and the service was launched in 1998, the first time Netflix took a gamble on emerging technology, and it clearly won. Rival Blockbuster filed for bankruptcy in 2010.
It’s worth noting that when Netflix tried to separate its DVD rental business from online streaming as a separate service called Qwikster in 2011, it sparked an outcry from consumers and the plan was eventually scrapped.