Netflix Ended the Business That Made It FamousBuild the Next Thing EarlyContent for Intellectualsmagazine.berelentless.in
19 October 2026 · 5 min read · 377 reads
Netflix started streaming in 2007, stumbled in 2011 and closed its DVD-by-mail service in 2023. A dated timeline of how it moved on.
On 29 September 2023, Netflix stopped mailing DVDs. The red envelopes that had carried its movies to people's homes for more than two decades were gone.
The company was not failing. It had picked a new future, and spent years leaving the old one behind. That is a hard thing to do while the old business still earns money, and Netflix did not do it perfectly. Its most famous mistake came right in the middle.
I read about this on Wikipedia, in an excerpt of Reed Hastings's 2011 note on Techmeme and in Popular Science's coverage of the 2023 shutdown. I have kept to dates and facts that those sources give.
According to Wikipedia, Marc Randolph and Reed Hastings founded Netflix on 29 August 1997 as a DVD rental service. In September 1999, it introduced monthly subscriptions, and dropped the per-rental model soon after.
By 2005 it had about 35,000 titles and shipped roughly a million DVDs a day, per Wikipedia. In February 2007 it delivered its billionth DVD.
That year also brought something else.
On 16 January 2007, Netflix launched a streaming service, then called "Watch Now". Wikipedia says it offered about 1,000 films to stream, against about 70,000 on DVD, and at first it needed Internet Explorer on a computer.
This is the part I find interesting. The new product was small and rough next to the old one. But it was launched anyway, while the DVD business was still thriving. The company built the future beside the present, not instead of it.
Then, in 2013, it released House of Cards, which Wikipedia says was marketed as the first "Netflix Original" production. Netflix had ordered the show in March 2011. So the company was already moving from sending other people's movies to making its own.
In July 2011, Netflix split its plans into a separate streaming plan and a separate DVD plan. Wikipedia says streaming was priced at $7.99 a month and separated from DVD rental. Hastings's note later said members felt the announcement of the split and the price changes lacked respect and humility.
Then, in September 2011, Netflix announced that the DVD business would become a separate service called Qwikster. The streaming service would keep the Netflix name. It meant two websites and two accounts for people who wanted both.
The reaction was bad. Wikipedia says 800,000 of its 12 million customers cancelled. I couldn't confirm that figure in a second source, so treat it as a reported number.
On 19 September 2011, Hastings wrote "I messed up" in a post that is excerpted on Techmeme. He said many members felt Netflix lacked "respect and humility" in how it announced the changes. In October 2011, Netflix dropped the Qwikster plan and kept the DVD service under the Netflix name.
It helps to separate the direction from the delivery.
The direction, which was a move toward streaming, was not what customers punished. The delivery was. The changes came with a price rise, a new name and an extra website, all in a short time and with little explanation. Customers felt they had been pushed around.
That is my reading of the events, not a claim from the sources. But Hastings's own words, about respect and humility, point the same way.
After the 2011 reversal, Netflix kept the DVD service alive for another 12 years. In April 2023, it announced the end, and the last day was 29 September 2023.
According to Popular Science, Netflix said it was not charging for discs not returned after that day, and customers could keep their discs. Popular Science reports that the service shipped more than 5.2 billion discs over its life, to about 40 million unique subscribers.
Notice the slow pace. There was no sudden "kill the old business" moment. The old service was left to shrink, then closed when the time was right. I don't have figures on when streaming overtook DVD in size, so I won't claim a date.
You don't need to be Netflix to use this. A local shop can start taking orders online while still serving walk-ins. A trainer can record a course while still teaching live. A manufacturer can test selling direct to customers while still supplying shops. In each case, the old way keeps paying the bills while the new way is learned. Over time, customers show you which way they prefer, and you can shift your energy there.
Also notice the customer side. If you must change prices or plans, tell people early, explain why in plain words, and avoid piling several changes into one announcement.
I want to be clear about the limits of this article. I did not find a source that says when streaming became bigger than DVDs for Netflix, so I have not claimed one. The title says DVDs "made it famous", which the founding story supports, but I am not saying they were its biggest business at the end. I also did not find Netflix's own accounts of every decision, so the reasons in this piece come from
That caution matters for owners too. When we tell company stories, it is easy to draw a clean line from "decision" to "result". Real life has more noise than that.
Think of one habit your customers have that may change in five years, such as how they order, pay or find you. Write one small experiment you could run alongside your current way, without replacing it.
Big changes are rarely one decision. They are many small steps. I want to start my own tests early, and when I change something customers rely on, explain it clearly and give them time.
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