Lots more logistics involved with physical compared to streaming. Time is zero sum, you they could of had a small profit off the 1 million users but they probably found the focusing on other lines of business would be more profitable or less of a hassle.
you're not wrong, but it's just crazy to me. They could've decided to do just 4K UHD Blu-Rays and charged $30 a month. There are niche's to be found. Like you said the opportunity cost is huge and so here we are.
From an outsiders perspective it's just incredible, though.
The business was shrinking and shrinking, and I don't see any meaningful growth in that area. If you know that one of your business avenues is eventually going down do a level where it makes no money (or might even start losing money since warehouses, personnel, logistics, dealing with delinquent non-returns, etc. all cost money to run) - why would you maintain it?
If someone believes there is still value in it, they can try filling it, but the only other player I see in that market is Redbox (whose business model is kiosks rather than postage), and they probably don't need anything Netflix has to offer.
As much as I dislike the modern tech/business sector, I think this makes perfect sense, even though I have a lot of nostalgia for it, so many good memories from the DVDs I rented over a decade ago.
Was that the problem, though, or was it just that it wasn't as profitable as the streaming business? The last most of us knew, the DVD business was still profitable.
The real story is probably about big corporate agendas being set by the market, which demanded higher profits on everything of a hulking company than a tiny niche business could produce. That combined with a desire to not bleed IP by spinning the DVD business off to be its own success.
Anti-trust laws ought to keep these things from happening.
It's speculated that the remaining business was slipping out of profitability without an overhaul. Users were dropping, movie selection is expensive to maintain, and distribution staff/centers ate the remaining revenue.
I bet it had a lot to do with those sticking around actually being the ones who use the service the most.
Similar to how gyms count on a decent chunk of members coming once a month or even less, but those members basically subsidize the $10/m price for everyone else.
This is a meaningless statement without knowing if it was profitable. If I started a streaming service that gave you $100 when you signed up I would get a million users. So do you want to buy that business from me?
I highly doubt Netflix DVDs were a high source of P2P rips. By the time something's available on DVD, it's already been ripped by scene groups from pre-release sources.
If anything, DVD ripping probably helped Netflix, as subscribers used it to build their own private archives.
Is this true? A friend tells me that torrents for new episodes of ongoing stream-only shows are typically up within minutes to hours of being released.
Both are true. There is more significant DRM on most streaming services than DVD, but also pirates are still consistently beating it. Hard to say if that had much of an impact on this decision though.
