Netflix to discontinue sales of used DVDs

Netflix plans to stop selling DVDs that were rented by subscribers, another step toward expanding its subscription focus from DVDs rented by mail to include movies streamed over the Web.

In a Netflix blog posting Monday, the company announced that it would discontinue sales of previously viewed DVDs on November 30:

As you know, our core business is delivering great movie rentals to you on DVD by mail and instantly to the computer and TV, so we've decided it makes sense for us to focus exclusively on that. This means we will stop selling previously viewed DVDs through the Web site. We're sorry for any inconvenience for those of you who regularly purchase DVDs at Netflix, but we're excited about being able to spend the extra time focusing on continually improving our core rental business for you.

Netflix announced on Friday that it had completed its first phase of beta testing of its new "Watch Instantly" movie-streaming player and was expanding access to include Macintosh-owning subscribers.

The company also said last week that it would be using Microsoft's Silverlight software to deliver streaming movies not only to PCs, but also to Intel-based Macs. The new Netflix player takes advantage of Play Ready DRM, which is built into Silverlight, for the playback of protected content on both Windows-based PCs and Macs. According to Netflix, this had not been possible with previous technologies.

Netflix isn't going to end its DVD rental program on November 30, so it's likely the company will sell its inventory of DVDs rented after that date to a third-party DVD dealer. While the move appears largely symbolic, it's a small step toward expanding the corporate--and public--focus from DVD rentals to movie streaming.

However, subscribers who offered feedback on the blog were overwhelming opposed to the move.

"I'm very disappointed," wrote one subscriber. "I use this service all the time and it's one of the main reasons I use Netflix. I'd hate to go back to Blockbuster..."

[JLBer]

Call me a conspiracy theorist but this sounds more like it's pressure from the MPAA to stop First Sale rights and give people one less alternative to "not buy new", exactly what Universal is trying to pull with that DVD kiosk company. I've bought several used DVDs from Netflix and I've been very pleased with all of them. So, exactly what is Netflix going to do with the DVDs that would otherwise have been sold as used?

[JLBer]

All right, nevermind. They said in the blog posting that they'll be selling the bulk off to wholesalers who will then resell the used DVDs.

I'd still rather blame the MPAA ... or at least Universal. :P

[saintseminole]

Which means I have to install Silverlight to view the movies online? No thanks. What about the 452 other viable media players ALREADY available... No, I won't install another one.

Besides, I joined Netflix to rent movies through the mail, with greater selection than my local storefront. When Netflix stops sending DVDs through the mail, then I'll stop my membership.

[sanenazok]

That's choice for you! Ain't it grand. I guess you can't please everyone.

[yankeeforever]

When they stop sending DVDs through the mail, I will stop my membership, too. I will not sit in front of a computer to watch a movie, and Comcast has put a cap on downloading so Netflix is stupid to change from what made them successful.

[chrisfrary]

Well I use linux and am not sure about moonlight (silverlight linux alternative) Any guesses to see how long silverlight stays cross-platform?

[steve4lee]

I've never bought a used DVD from Netflix. If I want to watch a movie again, I just put it back on my queue. But I think now I'll check their selection and see if I want to get some before Nov. 30.

Loathe as I am to install more Microsoft junk (Word 2008 crashed on me 3 or 4 times yesterday alone), I gave in and signed up for the Netflix beta and installed Silverlight. (At the first sign of any problem on my Mac Pro, however, Silverlight will be trashed, at least to the extent I can get shed of it.) So far it works fine. My slowest-available DSL connection means there's some renegotiation about 30 seconds in each time, and the picture quality won't compete with VHS much less DVD, but for watching "Fawlty Towers" and the like, it's OK.

My main complaint is that the Pro is my only Intel Mac, so I can't use the service over at my house where I spend my time off. It does prevent me from being tempted to watch something at the office on my iBook, too, so I guess there's a good side.

I don't envision keeping Netflix if and when they stop mailing DVDs. I suspect they found that the costs of inventory and such for the used discs made the sales more trouble than they were worth, and that may well be the biggest reason for this move.

[i_am_still_wade]

Netflix is sure making some blunders lately, and it will cost them. The first blunder was to charge extra for the privilege of getting Blu-Ray movies. I'll admit that Blu-Ray movies are insanely overpriced, but why not buy less of them instead of charging more? So I'm renting one last Blu-Ray movie and I'm not going to let Netflix charge more. The new fee is nothing but a way to say "we didn't raise prices" while raising prices.

The next blunder is to stop selling used DVD's. It is a blunder because it is not what customers want. Netflix became what it is by giving customers what they want.

And if Netflix decides to focus on streaming movies, that will be a nail in the coffin for Netflix. Already, internet providers are trying to put a cap on how much you can download, usually a low amount so that you will exceed the cap and get charged more. Of course, the cap is another way to raise prices without saying you raised prices. How many users are going to continue to use Netflix if they have to pay their ISP a lot more each month? Oh, and what about HD movies? Very few internet providers give enough bandwidth to stream a HD movie.

Netflix is getting away from made them successful. They better get back to it, else they will sink like Blockbuster.

[chili_picante]

Nowhere in this article does it state that Netflix is going to stop shipping DVDs. Given the current Internet streaming speed, I?m sure that Netflix will continue to offer the DVD-mailing service for some time. But, if Netflix doesn?t move into online streaming of content, it risks losing this market to another company.
I use the Roku/Netflix set-top box to stream content to my TV, and I?m quite happy with it, even with its limited capability. (I was aware of its limitations when I bought it.)

[P_F_M]

M$ is pushing hard to get into the streaming business with Silverlight (see www.smoothhd.com) and I'm sure they are making it worthwhile for Netflix to use their viewer. I don't think this means the end of DVD rentals by any means.

[lhill11]

I am extremely pleased with this decision and would prefer that Netflix make better use of its Roku partnership, which permit downloading of movies to the Roku device. The Roku device connects to the television and you select movies from your PC. I prefer hard drive downloads as I can watch them on the on go either on my laptop or iPhone. I've moved away from DVD media some time ago; I am a total hard drive supporter.