Netflix Refines Its DVD Business, Even as Streaming Unit Booms -- July 26, 2015
Netflix Refines Its DVD Business, Even as Streaming Unit Booms
* 3,400 discs zip through the rental return machine each hour, five times as many as when teams of Netflix employees used to process the discs by hand.
* Netflix now counts more than 65 million streaming members in more than 50 countries and plans to expand across the world in the next 18 months. But that breakneck growth comes at a cost: The company expects its streaming business to just break even globally through 2016
* DVD-by-mail operation, known for envelopes that wind up under sofa cushions and viewed by many as an anachronism in an era of lightning-fast streaming.
* Netflix has 5.3 million DVD subscribers, a significant falloff from its peak of about 20 million in 2010; still, the division continues to churn out hundreds of millions of dollars in profit each year.
* Netflix has not put a life expectancy on its DVD division.
* “If you cut back on service, you are going to lose your subscriber base,” said Hank Breeggemann, general manager of Netflix’s DVD division, who has worked for the company for 13 years. “Expect us to continue to ship DVDs for the foreseeable future.”
* “What’s interesting is that although the business is in a slow decline, there is still a huge demand there,” Mr. Breeggemann said of the DVD side, noting that Netflix had about 93,000 titles on DVD and next-
day delivery service for 92 percent of its subscribers.
* At its peak, Netflix operated about 50 distribution centers across the country. Now that number is down to
33.
* 3,400 discs zip through the rental return machine each hour, five times as many as when teams of Netflix employees used to process the discs by hand.
* Netflix now counts more than 65 million streaming members in more than 50 countries and plans to expand across the world in the next 18 months. But that breakneck growth comes at a cost: The company expects its streaming business to just break even globally through 2016
* DVD-by-mail operation, known for envelopes that wind up under sofa cushions and viewed by many as an anachronism in an era of lightning-fast streaming.
* Netflix has 5.3 million DVD subscribers, a significant falloff from its peak of about 20 million in 2010; still, the division continues to churn out hundreds of millions of dollars in profit each year.
* Netflix has not put a life expectancy on its DVD division.
* “If you cut back on service, you are going to lose your subscriber base,” said Hank Breeggemann, general manager of Netflix’s DVD division, who has worked for the company for 13 years. “Expect us to continue to ship DVDs for the foreseeable future.”
* “What’s interesting is that although the business is in a slow decline, there is still a huge demand there,” Mr. Breeggemann said of the DVD side, noting that Netflix had about 93,000 titles on DVD and next-
day delivery service for 92 percent of its subscribers.
* At its peak, Netflix operated about 50 distribution centers across the country. Now that number is down to
33.
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