Netflix Streaming Is Killing Off Physical Media — And Film Fans Should Be Worried


A couple of days ago, Buzzfeed put out a charming little video called “Video Stores Explained to Modern Kids.” In it, a soft-voiced narrator patiently explains how, once upon a time, we had to leave our houses to get physical copies of movies, wandering the shelves and picking from their finite selection of movies, which we’d then watch together because “this was before there was a screen in everyone’s pocket,” and then you had to leave your house again to return it.

The short’s warm glow of nostalgia softens the lesser aspects of the video store experience (late fees, limited selection, schmuck clerks), but it’s nonetheless an effective reminder of what at-home movie consumption used to be, before Netflix’s DVD-by-mail service put most of America’s video stores clean out of business. The trouble is, that service is looking more and more likely to be phased out by Netflix’s own streaming arm — and that’s cause for alarm if you’re concerned about the limitations of online streaming.

Netflix just capped off a very good third quarter, and when its CEO, Reed Hastings, discussed the company’s progress and outlook, it became clear that they’ve got plenty of irons in the fire: original movies, more original programs, worldwide expansion, etc. But he had little to nothing to say about what, at least back in the day, was ostensibly Netflix’s primary function: sending movies to your house in little red envelopes.

There’s a reason for that. Their impressive third-quarter earning report, aside from showing a healthy increase in profits and a surpassing of HBO in total subscribers, indicates that all of the company’s growth is happening in streaming. The Dissolve points us to this post by Giagom’s Janko Roettergs, who notes several factors leading to “the slow but inevitable decline of Netflix’s DVD business.” The streaming service has roughly 30 million subscribers; the DVD-by-mail version only has seven million, and that number has fallen by 50% in the past two years. The company has closed something like 20 of its distribution centers. Most importantly, the streaming service has exceeded the DVD arm in profitability. Add in a postal rate increase come January, and a shuttering of the physical DVD wing seems more and more likely.

It’s not the first time we’ve been down this road. Two years back, after a rate hike prompted a mass exodus of subscribers, the company attempted to separate its two divisions into two standalone companies: Netflix for streaming, “Qwikster” for physical media. The whole thing was a disaster, retracted before it could even begin, but it was evident from that point on that physical media was the redheaded stepchild of the Netflix family — and faced with that rate hike, the majority of subscribers chose to lop off the mailer option and stick with the cheap, easy streaming. When contracts with several providers expired on the same day this year (quickly dubbed “Streamageddon”), the company insisted that it wasn’t a big deal, since they weren’t a one-stop shop, but content curators: “Our goal is to be an expert programmer, offering a mix that delights our members, rather than trying to be a broad distributor.”

That’s a worrisome proposition, because even with DVDs still available by mail, that delightful mix is already impacting film consumption. Anne Helen Peterson, writing for LARB, despaired that Netflix is creating a “new canon” among young television viewers: “[A]s far as I can tell, the general sentiment goes something like this: if it’s not on Netflix, why bother?” The limited options for film viewers, particularly those looking for obscure or classic titles, are even more troubling. Like it or not, Netflix has positioned itself as the primary delivery system for at-home movie watching, and contrary to its claims, the company isn’t an “expert programmer”; it offers up whatever it can get from the content providers it has agreements with, and (like Blockbuster before it), Netflix is more interested in what’s new and hot than what’s old and good.

Don’t believe me? According to the fine folks at GoWatchIt, of the top 15 titles on the American Film Institute’s 2007 list of the best American movies, exactly none are currently streaming on Netflix. Among other subscription services, only one movie (Casablanca) is streaming free for Amazon Prime members; only one (City Lights) is available on Hulu Plus. Several others are available as á la carte rentals from iTunes, Amazon, and the like — and two titles (Raging Bull and Star Wars) aren’t even available via that method.

In other words, they’re only available via good old-fashioned physical media, and we’re in too much of a hurry to free ourselves of things you can hold in your hand when the alternatives aren’t yet ready for prime time. This is not some curmudgeonly old man talking; all appearances to the contrary, I love my Netflix streaming. But it’s ephemeral. Movies come and go from there willy-nilly, and it’s always been some small comfort to know that if I got an itch to watch some dopey ‘80s comedy that I didn’t wanna blow $20 on owning, I could throw it in the queue and see it a couple of days later. Of course, there was a time where I could just hop in my car, go down to the Blockbuster, and grab it there. Netflix helped put those folks out of business. But if they do the same to their own by-mail service, making giant chunks of cinema vulnerable to the whims of their own package deals and profit reports, they’ll be doing a genuine disservice to film history itself.