The above graph represents the Netflix DVD revenue by quarter, starting from fiscal Q1 2012 to the recently completed quarter. Surprisingly, despite the declining DVD revenue and subscriber base over that 8 years, the company continues to offer DVD-by-mail service in the United States. Netflix revenue from DVD services declined 18.4% YoY in Q2 2020, to an all-time low of $62 million.
It is important to note that DVD segment accounts for nearly 2.6% of Netflix’s total quarterly revenue from United States.
Decline in Netflix DVD Business: History
|Source||Netflix Quarterly Reports, SEC Filings|
|Note||Netflix financial year – January 1st to December 31st|
As the graph shows, Netflix DVD revenue has consistently been declining since Q1 2012 as the company is losing DVD subscribers in the US. In Q1 2012, Netflix quarterly revenue from Domestic DVD segment clocked $319.7 million, representing 36.8% of the company’s total revenue. In just three years, the company witnessed a notable 45.8% YoY decline in its US revenue from DVD, amounting to $173.2 million in Q1 2015. Surprisingly, in fiscal Q1 2018, Netflix quarterly revenue from DVD segment dropped to $98.75 million for the first time.
About Netflix Inc.
Netflix Inc. (NASDAQ: NFLX) was founded on August 29, 1997, by Reed Hastings and Marc Randolph as a DVD-rental-by-mail firm. However, the company began its operations on April 14, 1998, by opening the world’s first online DVD rental store. For $19.95 a month, subscribers can rent as many DVDs as they want. The company slowly expanded its business by offering the streaming service in the US while retaining the DVD and Blu-ray rental service. In September 2010, the company began offering its streaming service to Canada, which later expanded to other international markets such as Latin America, the United Kingdom, Ireland, Australia, etc. Netflix is now available almost every corner of the world, except in mainland China (due to local restrictions), Syria, North Korea, and Crimea (due to US sanctions).
Netflix’s IPO (initial public offering) completed on May 29, 2002, selling 5.5 million shares of common stock at the price of $15.00 per share.
On January 22, 2018, Netflix’s market capitalization ballooned to $100 billion, becoming the largest digital media and entertainment company in the world.
Netflix is ranked #38 on the list of the World’s Most Valuable Brands by Forbes, with a brand value of $15.5 billion in 2019.
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