Netflix ending DVD-by-mail business

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On April 18, Reuters - Netflix Inc is winding down its DVD-by-mail business, the company said in a blog post, ending the service it started around 25 years ago.

The company said its DVD rental business had been expanding and it will not be able to continue to provide quality service. Netflix will release the last two DVDs on Sept. 29.

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 said in a blog post announcing the DVD service had entered its final season. Netflix co-founder Marc Randolph said in his autobiography that he and co-founder Reed Hastings have flirted with the idea of challenging Blockbuster Video with mail-order VHS cassettes, but it would have cost too much. They instead landed on a more budget-friendly offer: DVDs sold and rented online.

In 1997, it was a calculated risk that the nascent DVD player, which went on sale for the first time in the U.S., would catch on with the consumer. In 1998, the site launched with fewer than 1,000 titles, Randolph said.

Betting on DVDs was a risk, said Randolph, writing that the creation of Netflix and the Amazing Life of an Idea was a risk. But it may also be our way to finally crack that category, he said. Netflix's gamble on an emerging technology enabled it to challenge an entrenched rival. From the beginning, our members loved the choice and control that direct-to-consumer entertainment offered, Sarandos said.

When Netflix tried to separate its DVD rental business from online streaming in 2011 to a separate service called Qwikster, it caused a wave of protest from consumers.