Netflix sees DVD business withering, gives up on video games


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Netflix has given up all hope that there’s a future in DVDs.

Just last summer, the subscription video company was touting the potential of its DVD business as it established a separate unit to focus on it. ‘In Q4, we’ll also return to marketing our DVD-by-mail service, something we haven’t done for many quarters,’ Chief Executive Reed Hastings and Chief Financial Officer David Wells said in a July letter to shareholders. ‘Our goal is to keep DVD as healthy as possible for as many years as possible.’

But since the Qwikster debacle, when Netflix announced a separately branded business for DVD rentals and then abandoned it in the face of public outcry, the company appears to have given up on that goal.


On an earnings conference call with analysts Wednesday, Hastings said Netflix now has no plans to spend any marketing dollars on its DVD-by-mail service, which lost 2.76 million subscribers during the last three months of 2011.

‘We expect DVD subscribers to decline each quarter forever,’ he said.

When the Qwikster plans were announced, Netflix also said it would add video games to its DVD-by-mail business. But Hastings said the company has given up on that plan as well.


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-- Ben Fritz