Over 25 years (1998-2023), Netflix shipped >5 billion DVDs and still had DVD rental sales of ~$150m in 2022.
The busiest weeks sent 1.2m DVDs.
It was a major logistics achievement. And one key innovation was the automated rental return machine (AARM).
A single person could open ~600 DVDs per hour (checking titles, finding damage, cleaning discs). The AARM processes 3,500 DVDs per hour.
“At its height, Netflix was the Postal Service’s 5th-largest customer,” writes the New York Times. “[It] operated 58 shipping facilities and 128 shuttle locations that allowed Netflix to serve 98.5 percent of its customer base with one-day delivery.”
The AARM (Netflix owned >100 of them) had “the precision of a Swiss watch manufacturer”. And it helped the DVD business grow to 20 million subs and ~$1B in sales by early 2010s.
As the streaming business took over, Netflix’s full final year of DVD rental sales (~$150m) was only 0.5% of $32B total revenue.
The first DVD test-shipped was “Casino” and the first official DVD sent to a customer was “Beetlejuice”. The final DVD sent was “True Grit” in September 2023.
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Good background from NYT: https://t.co/YQNN7EjPJq
Interesting piece from Bronway, which won the contract to make the AARM (explaining their approach with videos): https://t.co/XxY72aE9Aa
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