Netflix is ending its signature DVD delivery service

Netflix is officially retiring its famous red envelopes after nearly 25 years and over 5 billion mailings.

On Tuesday, the company announced that it would end its DVD delivery service in September of this year. The company originally was a pay-per-rental service in 1997, as bulky VHS tapes began to lose favor and more and more viewers purchased home DVD players. The company switched to a subscription model two years later.

“After an incredible 25-year run, we’ve decided to wind down later this year. Our goal has always been to provide the best service for our members but as the business continues to shrink that’s going to become increasingly difficult. So we want to go out on a high, and will be shipping our final discs on September 29, 2023,” co-CEO Ted Sarandos wrote in an announcement.

Since Netflix launched its streaming service in 2007, the DVD-by-mail business has slowly declined. The company has tried to shift customers away from the relatively costly DVD rental service to streaming. According to the company, the DVD business generated $145.7 million in 2022, around 0.5% of its total revenue.

Mr. Sarandos thanked all movie lovers for using the service over the years in his announcement on Tuesday.

“To everyone who ever added a DVD to their queue or waited by the mailbox for a red envelope to arrive: thank you,” he wrote.

In 2011 Netflix attempted to create a separate company, called Quickster, to handle its DVD-by-mail business. After a fair amount of ridicule and pushback from customers, the company reversed the decision. The revenue from the company’s DVD service quickly dried up soon after.