DVD is dead. Long live the DVD. The writing was on the wall for many years, but Netflix’s Tuesday announcement that it will end its DVD-by-mail business still came as a surprise. Just last year, that business made $146 million. Still, Netflix is nothing if not relentlessly focused on the future, so DVDs no longer pass what’s widely known as their “keeper test.” And they’re out. It’s the end of an era for Netflix. Some will undoubtedly also see it as another death knell for the DVD itself.
We’ve read the obituaries before: Blockbuster, Columbia House, and just about every mom-and-pop video store you once pored over each Friday night. At its peak in 2005, the DVD industry was worth more than $16 billion. But between 2008 and 2019, as consumers struggled through the Great Recession and streaming took off, DVD sales plunged more than 86%. In 2022, the market was around $1.5 billion. The story of DVDs, and its cousins Blu-rays and 4K UHD Blu-rays, is another in a long line of new technologies that sooner or later meet their obsolescence. But it remains an open question if DVDs will be the new vinyl, cassette tape, or 8-track. I’m betting on vinyl.
My company, Kino Lorber, did deals with Netflix in the early days, partnering with “Red Envelope” to jointly acquire titles that we released theatrically, while they handled DVD and streaming, for a while. Today, DVDs remain a bright spot for our business, built on a library of over 4,000 highly curated classics and arthouse titles. Our customers who buy them aren’t necessarily who you would expect. A surprising number of them are from younger generations, who want to hold onto something real that they love and cherish. And the appetite for premium formats remains healthy. In 2022, industry sales of premium 4K UHD Blu-ray titles experienced 20 percent growth, and we’ve exceeded that growth in our own 4K business.
We’re seeing those signs of life because in the streaming era, we risk losing something fundamental: pride of ownership. You don’t own Netflix. And when you don’t own it, it can go away. We’ve seen the dangers of this over the last year with shows getting erased overnight from streaming services who’ve prioritized tax credits over a finely curated and long tail collection. The only way to guarantee you can still watch that unique film or show you love is to own it yourself. In my own collection is “The Compleat Beatles,” the then-definitive 1982 documentary narrated by Malcolm McDowell, which was the first DVD (and VHS) I ever owned, and Fritz Lang’s “Metropolis,” the film I’m proudest to own and the one that inspired me to buy Kino (now Kino Lorber).
When you go see a movie, it says something about the movie: the writing, directing or acting were impressive, the marketing worked. But when you own a movie, it says something about you. Like a milk crate full of vinyl records, a shelf full of DVDs is a statement of taste. Fans regularly send us photos of their wall of Kino Lorber films; they’re trophies of experiences that shaped their lives. The story of your collection is the story of you, embedded in you, and a part of your identity. Many parts of our lives are becoming ever more transactional and ephemeral. So make sure that when you find something beautiful, that touches you, that is perfect, own it.
Richard Lorber is chairman and CEO of Kino Lorber.