When Michael Scalise, a 32-year-old from Missouri, wants to settle down and watch something on Netflix, he doesn't start by opening his computer or firing up his smart TV. Instead, he checks his mailbox.
"I still tend to think of DVDs as the core service and streaming as an add-on, even though I know that's not what it is to most people," he tells CNBC. "I still watch far more content on DVD than I do streaming."
Scalise, who first signed up for Netflix in 2000, is one of the several million people who still wait expectantly for those once-iconic red envelopes. On Monday, Netflix reported 3.4 million remaining DVD subscribers in its fourth-quarter earnings release, down 186,000 since Q3, 731,000 year over year and 16.6 million from 2010's peak of about 20 million subscribers.
But even as the service sheds members, Netflix has no motivation to formally phase out the DVD business. After all, it still pumps out profit — $62.7 million last quarter — which the company can inject into its fast-growing streaming business.
Netflix just announced a whopping 117.6 million digital subscribers worldwide and plans to spend $7.5 billion to $8 billion on content this year. The company also surpassed $100 billion in market cap for the first time after its earnings announcement Monday.
Although there's only one "Netflix" that reports earnings, the business really does think of itself as two separate companies: one for the ambitious streaming service and one for the waning DVD business.
That business, DVD.com, has its own website, management team, benefits package and headquarters located near the main Netflix headquarters in the Silicon Valley town of Los Gatos, California. If you visit the office of each business "you won't believe it's same company," one current employee tells CNBC.
While the streaming business continues to swell, DVD.com is basically just trying to stay afloat as long as the business remains tenable. As that same employee describes it, the experience of working on the DVD side during these twilight years is "quite exciting, interesting, and a little sad altogether."