It’s been a long time coming, but Netflix has announced that after 25 years and 5.2 billion discs, it is ending its DVD-by-mail business segment.
We can still remember how innovative Netflix was when it started its mail movie rental business using its trademarked red envelopes. Just select a movie and add it to your queue, get in the mail, and return it whenever you want. No late fees. No postage required. No driving to stores. Genius.
Netflix truly was a pioneer, first in mailing DVDs directly to homes, then in recognizing that viewers would move to Internet streaming services. At its peak in 2003, there were an estimated 20 million Netflix subscribers receiving movies in the mail.
Today, Netflix has 232.5 million subscribers around the world and is the market-leader in streaming entertainment. The company continues to evolve services, adding a tiered payment system that lowers the price for viewers willing to watch advertisements. It also plans to crackdown on password sharing starting the new tier in four markets – Canada, New Zealand, Portugal, and Spain. Netflix has stated that the revenue growth in Canada is faster than in the U.S.
Netflix also attributes its growth to new seasons of existing shows, plus original series such as “The Night Agent” along with original films such as “Murder Mystery.”
How do you watch movies?
Group Activities and Discussion Questions:
- Review Netflix in class. https://about.netflix.com/en
- Poll students: What streaming services do they have?
- Pick the top services named by students. Divide students into teams and have each team research a service, including company history, revenue, types of services, prices, number of subscribers.
- NOTE: As an alternative, teams could prepare a SWOT analysis for each company.
- Next, discuss the components of a situation analysis: company, general industry, trends, key competitors, technology, legal, etc.
- Ask students what data they would want in order to make a marketing decision for Netflix services. What data was used to determine it was time to cancel mailing DVDs?
- Divide students into teams. Have each team use laptops to do general research to answer the questions above. (ex: overview of industry, size, growth, new technologies, environmental impact, etc.)
- Debrief the exercise. What will be the next chapter in the entertainment streaming industry.
Source: Sperling, N. (18 April 2023). Netflix will end its DVD service, 5.2 billion discs later. New York Times.