Netflix might be focusing on its streaming business, but the produce that made its name is still alive—and apparently well.
The company’s DVD.com DVD rental business has 3 million subscribers and generated a whopping $56 million in profit on just $99 million in revenue during the first quarter, CNBC is reporting. That staggering profit margin aside, Netflix’s business has a wide selection of 100,000 DVDs, which easily overshadows the 5,600 streaming titles available on Netflix, according to the report.
DVD.com’s profitability might surprise some who moved on long ago from disc-based entertainment in the living room to streaming. Indeed, Netflix itself seemed to have moved on in 2011 when it split the DVD division from its now-core streaming operation. And whenever Netflix discusses its business, the company focuses on streaming and its place in the original content market rather than DVDs.
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But it was DVDs that helped Netflix get its start. By offering customers the option to rent DVDs through its website and then have those discs delivered to their homes, Netflix offered a far more convenient option than retail stores, like Blockbuster, that required customers to walk in to get their discs. The move ultimately killed brick-and-mortar DVD rentals and solidified Netflix’s position as a market leader.
Despite its apparent success, Netflix’s DVD division isn’t exactly poised for growth. At its height, Netflix’s DVD business, which is celebrating its 20th year, had 50 distribution centers all sending out discs to customer homes. Now, though, it has 17 facilities left.
If you’re interested in stepping back in time and signing up for Netflix’s DVD service, plans are still available. They start at $5 a month.
