Not all Netflix subscribers know that the streaming service started providing video services on a different platform: DVDs.
Before streaming picked up, the Netflix business had focused on shipping DVDs by mail to its clients. While its streaming movies and shows is now the flagship service of Netflix, the company continues to mark milestones from its DVD subsidiary since its inception more than two decades ago.
5 Billion DVDs Delivered
DVD Netflix announced on Twitter that it sent out its 500 billionth physical disk on Monday, Aug. 26.
5,000,000,000 shipments. F I V E B I L L I O N . The most heartfelt thank you to our incredible members that have been with us for the past 21 years of DVD Netflix. Five billion discs delivered is a huge milestone and we owe it all to our amazing members and team members. pic.twitter.com/Eg1bjEMtcx — DVD Netflix (@dvdnetflix) August 26, 2019
According to Variety, it was a delivery of the film Rocketman, which has yet to become available on the streaming platform.
Netflix's DVD Business
Netflix started delivering DVDs by mail all over the United States in 1998, then marked its first billion shipments by 2007.
Its video streaming service launched after the one billion, but it was initially a bonus perk for subscribers of the DVD delivery service. Eventually, Netflix decided to divide its DVD and streaming subscription services into separate businesses.
Over the years, the subscribers of DVD Netflix declined as the market moved to the digital space. Variety noted that the DVD service went from 14 million subscribers in 2011 to 2.4 million subscribers in the last fiscal quarter.
However, while Netflix is certainly more popular with its online platform nowadays, the business of shipping physical disks remains a profitable subsidiary for the company. DVD Netflix earned nearly $46 million in profits in Q2 2019.
The Future of Netflix
While Netflix remains one of the major players of the streaming landscape, it is facing big challenges ahead with so many competitors entering the arena.
"While there is no true 'Netflix killer' on the market, Disney's upcoming bundle with Disney+, Hulu and ESPN+ probably comes closest," said eMarketer forecasting analyst Eric Haggstrom in a report from Forbes. "Netflix's answer has been to stick to what has made it the market leader: outspending the competition on both licensed and original content, offering customers a competitive price."
In the second fiscal quarter of 2019, the company saw an overall paid subscriber decline in the United States. In the same period, analyst firm eMarketer revealed that rival streaming services such as Hulu and Amazon Prime both gained shares-and rivals are primed to take more shares from Netflix in the future.
For now, Netflix remains ahead of the pack with 158.8 million viewers in the United States in 2019, which is projected to grow to 177.5 million in 2023.
Haggstrom pointed out that the company is likely to stay on top as it takes time for new streaming platforms to take a slice of the market and build a large catalog of content that consumers are willing to subscribe to.
