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Netflix letting its DVD business die a little faster

Peter Kafka
Netflix headquarters in Los Gatos, California.
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It's sort of hard to remember now, but Netflix, the streaming video service, used to be Netflix, the DVD-by-mail service.

And in fact, Netflix is still a DVD-by-mail service for 6.7 million people. But that number used to be twice as big. And after a violent and unsuccessful attempt to kill it off quickly, Netflix has been happy to let its DVD business shrink — profitably — for several years.

Netflix does nothing to promote its DVD offering — go ahead, try finding any mention of DVDs in the company's pitch to new members on its site. And it has been shuttering its DVD distribution centers for some time.

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Last month, the company made the next logical move and stopped delivering DVDs on Saturdays. That saves them money, and makes DVD rentals less attractive. But as Engadget points out, you probably didn't notice.

Again, Netflix is happy to keep renting DVDs to the audience that wants them, because renting DVDs is a lucrative business — Netflix figures DVDs will generate a profit of $92 million this quarter. But all of its time, money and resources are going to streaming, a business that should have 50 million subscribers when the company reports its third-quarter earnings next week.

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—By Peter Kafka, Re/

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