Netflix to end DVD-by-mail service that changed video rental industry

SAN FRANCISCO (AP) — Netflix is poised to shut down the DVD-by-mail rental service that set the stage for its trailblazing video streaming service, ending an era that began a quarter century ago when delivering discs through the mail was considered a revolutionary concept.

The DVD service, which still delivers films and TV shows in the red-and-white envelopes that once served as Netflix's emblem, plans to mail its final discs on Sept. 29.

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Netflix ended last year with nearly 231 million worldwide subscribers to its video streaming service, but it stopped disclosing how many people still pay for DVD-by-mail delivery years ago as that part of its business steadily shrank. The DVD service generated $145.7 million in revenue last year, which translated into somewhere between 1.1 million and 1.3 million subscribers, based on the average prices paid by customers.

Shortly before Netflix broke it off from video streaming in 2011, the DVD-by-mail service boasted more than 16 million subscribers. That number has steadily dwindled and the service's eventual demise became apparent as the idea of waiting for the U.S. Postal Service to deliver entertainment became woefully outdated.

But the DVD-by-mail service still had die-hard fans who continued to subscribe because they treasured finding obscure movies that are aren't widely available on video streaming. Many subscribers still waxed nostalgic about opening their mailbox and seeing the familiar red-and-white envelopes awaiting them instead of junk mail and a stack of bills.

"Those iconic red envelopes changed the way people watched shows and movies at home — and they paved the way for the shift to streaming," Netflix co-CEO Ted Sarandos wrote in a blog post about the DVD service's forthcoming shutdown.