Netflix to stop selling used DVDs to customers

Discs will go to wholesalers instead

By Danny King -- Video Business, 11/5/2008

NOV. 5 | Netflix will stop selling used DVDs to customers at the end of the month in an effort to focus more on its DVD-rental and video-streaming business.

The largest DVD-rental service via mail, which had been selling its previously-viewed discs to subscribers for as cheap as $5.99, will stop doing so Nov. 30, though it will continue to sell the discs to wholesalers.

During the third quarter, Netflix sold $1.6 million worth of used DVDs to subscribers and wholesalers combined, or less than a half a percent of Netflix's total revenue, according to company spokesman Steve Swasey, who added that the change in policy wasn't an indication that the company would focus less on packaged media.

Netflix this year has tried to boost subscribers by augmenting its by-mail service with an expanded inventory of titles through its streaming service and partnering with component makers to allow its streaming to be accessed directly from TV sets. Within the last two weeks, Netflix has agreed to have its inventory of more than 12,000 digital titles streamed through TiVo digital video recorders and Samsung Blu-ray Disc players.

In May, Netflix CEO Reed Hastings said the video-streaming service would help the company double its subscriber base within a decade. Still, the decision to stop selling used DVDs to subscribers doesn't reflect a move away from the DVD business, said Swasey.

"We see DVD rental at Netflix growing for at least another five to 10 years," said Swasey. "This has nothing to do with anything but focusing on the core of our business."