When I heard about Netflix separating its DVD out, I wondered why this they were doing to customers like me. It’s more expensive and less convenient.
Here’s the deal. Netflix killed Blockbuster and the brick and mortar DVD rental business. I was glad to be rid of the late fees and the errands. One by one, the Blockbusters and Hollywood stores closed.
At this point Netflix has to be one of the biggest buyers of back catalogue DVDs. Sure there’s a section of DVDs in the bookstores and Walmart, but its a collection of low cost evergreen movies and collectors items. Eventually DVDs and DVDs will disappear more or less the way CDs have.
By now owning DVD rental and then killing it, they gain leverage over the studios in pushing the entire catalog to streaming as has already happened in music.
Netflix knows that disc storage will be as niche as CDs in the future and wants to own the next distribution system. Netflix wants to force the future in the way that Apple forced the future in music with iTunes.
