Netflix is closing the Digital Video Disc (DVD) rental service after 25 years, this is a part of earning report for the first quarter, which shows how dominant streaming has become for the company. Netflix co-CEO Ted Sarandos said: ‘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.’ The last discs will be posted on 29th September 2023. The company, which upended the television and movie industry as it moved from DVDs to online streaming, is now struggling to reignite growth. As it tries to boost subscribers, the firm has cracked down on password sharing in some countries. It plans to launch those measures more widely, including in the US, by July.
In a bid to bring in audiences, the company also introduced an advertisement-supported, less expensive streaming option last year and cut prices in 116 countries in the three months to March. It also forecast weaker growth in the months ahead which was lower than many analysts had expected. Despite the moves, the company added just 1.75 million paid memberships in the January to March period.
In a letter to investors, Netflix said it was pleased with how members have responded to changes that require people to pay to share passwords. It warned investors to expect some cancellations as it expands those measures, but said: "Longer term, paid sharing will ensure a bigger revenue base from which we can grow as we improve our service". It also forecast weaker growth in the months ahead which was lower than many analysts had expected.
Netflix has estimated that more than 100 million households share passwords in breach of its official rules. In Canada, where the changes were introduced in February, its paid membership base is now larger and revenue growth has accelerated, it said.
Overall revenue was up 3.7% year-on-year to $8.1bn. It reported $1.3bn in profit, down from nearly $1.6bn last year.