While it rents physical discs to only a fraction of the customers it served as recently as 2010, Netflix still has 4.2 million subscribers who regularly rent movies and TV shows on DVD and Blu-ray, and the SVOD giant doesn’t appear to have plans to shutter the business soon.
Sifting through Netflix’s earnings reports and other documents, The Next Web said the streaming company is still generating quarterly revenue of $132 million from disc rentals through its DVD.com portal.
Netflix, of course, began life as essentially a company that shipped physical media to customers, using the internet merely for interacting with its DVD-renting customers.
The company has evolved to the point where it is now streaming 125 million hours a day of TV and film programming to 86 million customers spread out across 190 countries.
Netflix’s disc-rental business peaked at 20 million subscribers back in 2010. The decline of disc rentals has been precipitous—Netflix was down to 6.26 million disc-renting customers in 2014 and 5.3 million in 2015.
But Netflix already got burned once before by messing with this fading portion of its business.
Back in 2011, the company famously tried to bifurcate streaming and disc-rental customers, separating them into distinct $7.99-a-month services. The backlash was swift and dramatic. The company lost 800,000 subscribers, and its stock price dropped by 77%.
The company doesn’t talk too much about this legacy revenue stream these days.
However, speaking to the New York Times in July 2015, Hank Breeggemann, general manager of Netflix’s DVD division, said, “If you cut back on service, you are going to lose your subscriber base. Expect us to continue to ship DVDs for the foreseeable future.”