We reported, last week, that Netflix is raising its streaming prices. And while the price increase might shock you, this piece of information might shock you more: Netflix still has 3.7 million DVD subscribers in the United States. That’s a huge number of subscribers, don’t you think? These people get their discs delivered through the mail, for the same price it has always cost – $7.99 a month. (Well, that’s been the price since 2011) Is this just jaw dropping for me, or does anyone else find these numbers staggering? Netflix reports that this number is down from a year ago, by 17%. It’s good to know that people are either canceling the service altogether or switching to streaming online. The former isn’t “good” for Netflix though.
But why does Netflix even allow this? I’m sure it costs money to create these discs, so I would suspect they would be losing money on this venture. Netflix began separating out it’s DVD and streaming subscription services back in July of 2011. It was $7.99 for each service. Streaming was originally added as a bonus for DVD subscribers at no extra cost. Which makes sense, but Netflix likely suspected this would die out after a year or two of offering the service.
So why is Netflix still sending out their DVD’s? Well, it has to do with access to the internet. There are approximately 34 million Americans without access to broadband internet. Which is also a staggering number, if you ask me. Especially since the internet is being viewed as an essential service, rather than some kind of extra or luxury. With so many people lacking quality internet, this kind of service does make sense. But I still wonder if it’s sustainable for Netflix. Especially since they have 52 million streaming subscribers. DVD subscriptions make up a fraction of that. And like I said before – how much money are they spending on sending out the DVD’s and does it benefit Netflix?
Did you know that Netflix launched their online DVD rental service in 1998? How sophisticated was the service at the time? I will give Netflix some credit though. Instead of ditching the DVD division, they decided to work on streaming so it could continue to service those loyal customers. It’s interesting to note that some of the movies become available on DVD before they become available on the streaming service. It also might be worth noting that the DVD library is likely bigger than what is available online. This is presumably due to the fact that Netflix removes titles from the streaming service, but I can’t see them disposing of DVDs unless they’re damaged.
Maybe the most incredible part of this subscription service is that shipping is free. Not only that, but the DVDs arrive in 1-3 business days right to your mailbox. When you’re finished, all you have to do is place the DVD in the prepaid red envelope and put it in the mail. Once the DVD is received from the post office, they will send you another. Now I’m not advocating this as my preferred option. But if you don’t have high-speed internet, this actually isn’t that bad. Especially when it comes to the cost. You can’t go wrong with free shipping. And the subscription service price itself has not gone up in quite some time. If you have internet access, however, streaming is the way to go. But if you don’t, you should check out this service.