[alephnerd]

Companies have a finite amount of money.

If the DVD and Blu-ray rental userbase is dropping, I could cut that division's budget in half and move it to another division that is generating much stronger traction (eg. Netflix Korea and their KDrama acquisitions making Netflix a market leader in Asia).

The TAM of the DVD/Blu-Ray rental market has fallen, so as a company, it's best for me to fire those customers - either by slowly degrading the service so they change to the mainstream service, or deprecating the entire service.

> 100k titles. No streamer has that.

But

1. Do does a large enough userbase actually want that?

2. Can that large enough userbase spend enough margins on that service to generate a healthy profit?

3. Are my operating costs for that division rising faster than the revenue from that division?

If all 3 of those answers aren't satisfactory, you end up shutting down an initiative.

Also, there's always FMovies or Pirating for those who really really want it.

[rtkwe]

It's a chicken and egg argument, we don't have access to the internal metrics to really know which came first, sliding users or diversion of resources to quietly kill the project.

[listenallyall]

No, it's really not. DVD sales are way down, DVD player sales are down, many young people have never touched a DVD.

[rtkwe]

I'm not particularly shocked dedicated player sales are down given how ubiquitous DVD players are in basically everything (laptops, desktops and game consoles) and how long they last. Also that doesn't really answer how that trend was spooling out to the mail order rental business over the recent past, people have been using streaming a lot for ages but the business still made sense to keep going before so what in the near term finally made the lines cross?

[hhh]

I haven't seen a DVD drive in a computer I have bought in almost 10 years.

I only see one today in the PS5 and Xbox Series X, and from the recent Xbox leak it looks like that's going away.

[alephnerd]

Off the top of my head, the costs of logistics has skyrocketed since COVID due to staffing shortages and Teamster Union actions/strikes.

[rtkwe]

Have costs actually increased for the kind of small packages Netflix is sending disks in? The rate for large shipments by the container load have fallen back to around their pre pandemic levels from what I'm seeing in a quick search. That's not really relevant to the kind of shipping costs Netflix would be seeing for it's disk service though but I'm not really finding a chart tracking that.

https://www.statista.com/statistics/1250636/global-container...

[im_z]

Ok, but my point is you can't just claim the revenue is shrinking as evidence there was no demand when the service itself is getting worse. Perhaps that alone explains most of the reduction. People using the disc service in 2020 had ample time to move to streaming so clearly there was something about the disc service that they found worthwhile.

[alephnerd]

> revenue is shrinking as evidence there was no demand

Revenue shrinking means there isn't monetary demand. Consistent YoY shrinkage is enough reason to shut down an initiative.

Brownie point initiatives only make sense during a low interest rate environment. If revenue is dropping significantly with no foreseeable market growth, that money can be better deployed in other growth opportunities, or kept in a bank, or given back to investors via stock buybacks or dividends to ensure stronger investor relations and higher valuations.

If you feel there is actual market demand that can be satiated, feel free to build your own alternative. Maybe the economics work for you. This is a forum maintained by YCombinator...