Netflix Still Makes Money from DVDs

#Companies

Mon, Jul 27th, 2015 11:00 by capnasty NEWS

Albeit its customer base is dwindling, Netflix still makes millions of dollars with its original business model: renting DVDs. Reportedly, access to recently released films not available on its streaming service can be watched via the reliable DVD rental service. And, thanks to automation, the company was able to streamline the return process, requiring just 25 employees to handle everything.

Netflix has 5.3 million DVD subscribers, a significant falloff from its peak of about 20 million in 2010; still, the division continues to churn out hundreds of millions of dollars in profit each year. And behind the scenes, engineers are trying to improve customer service and streamline the labor-intensive process of returning, sorting and shipping millions of DVDs each week.

Netflix has not put a life expectancy on its DVD division. Even as its subscriber count shrinks, the group has kept a core base of customers, particularly in rural zones with lackluster Internet service and among people who want access to the breadth of its selection, and executives expect it to stay around. To hold on to those customers — and the profits they bring — Netflix continues to deploy innovative technologies that help trim costs as well as improve customer service.

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