Netflix kills used-DVD sales, focuses on streaming video

Netflix says streaming video will complement DVD, Blu-ray rentals

Online video rental business Netflix Inc. will no longer sell used DVDs to its customers and instead focus on expanding its video streaming business.

According to a Netflix spokesperson, the sale of used DVDs for $5.99 or $7.99 hasn't been a big business for the company, so it will discontinue the service to customers and sell the used DVDs to wholesalers instead.

"Netflix is a DVD rental company, and that's been our core business for 10 years, and we'll continue to grow that business for five to 10 more years," said Steve Swasey, vice president of corporate communications at Netflix. "In the meantime, we're also investing in streaming."

Netflix has been working on expanding its streaming business over the past year through partnerships with set-top box and game console companies.

In May, Netflix partnered with Roku Inc., a vendor of set-top boxes that stream Netflix movies. Then LG introduced a Blu-ray Disc player that streams movies instantly from Netflix to a TV. This was followed by Samsung, which announced two Blu-ray Disc players that can stream Netflix movies.

Last week, Netflix announced a partnership with TiVo, which will start allowing Netflix streams in December. Netflix also has a deal involving Microsoft's Xbox 360 that will allow customers to stream movies to their TVs.

Netflix also announced last week that Microsoft Silverlight-enabled Netflix movies are now available for streaming onto Intel-based Macintosh computers.

But Swasey said the streaming business will in no way affect the DVD rental business or the future of Blu-ray Disc rentals. To the contrary, Swasey said, the streaming business is complementary to those rentals.

He also said Blu-ray will continue to grow in the consumer market over time, saying "as people's DVD players need to be replaced, they'll replace them with Blu-ray players. That's a growth opportunity." Netflix claims to have 8.7 million customers.

Copyright © 2008 IDG Communications, Inc.

7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon