Discontinuation of Netflix show: Red Envelope

By: Kate Gruetter


On Apr. 18, Netflix CEO Ted Sarandos released a statement announcing the end of the streaming platform’s iconic red envelope service, which has been delivering DVDs to mailboxes for 25 years. Despite its rich history and former popularity, declining subscribers have made the business less profitable and more difficult to maintain. With Netflix mailing its final discs on Sept. 29, the end of an era has many users reminiscing. Colin McEvoy, a formerly avid user of the red envelope service, recalled first signing up in high school: “Now I have friends who’ve seen my red Netflix envelopes arrive in the mail, and either didn’t remember what they were or couldn’t believe that I still got the DVDs in the mail.”

First launched in 1998, Netflix began by offering an easier alternative for renting DVDs. Rather than making viewers drive to pick up and return films, Netflix offered a service that mailed DVD discs to viewers in memorable red envelopes. According to co-founder Reed Hastings, a 40 dollar Blockbuster fine for returning a movie late inspired the idea for a service that mailed DVDs without late fees or due dates. The concept began with a pay-per-rental system, though soon Netflix changed its model to a flat-fee subscription with unlimited rentals. Boasting 58 shipping locations at its height, many believe Netflix’s red envelope service destroyed the other DVD providers of its time like BlockBuster with its efficient and affordable setup. 

At its peak, the Anaheim distribution plant for Netflix’s envelope service processed 1.2 million DVDs a week and generated millions of dollars worth of revenue. Once bustling with 50 employees, the location now only has six. Most of these workers have been with the company for a decade, if not longer. Employee Edgar Ramos has worked at the Anaheim warehouse since high school, developing a talent for running Netflix’s auto-sorting machines and the Automated Rental Return Machine. “I am sad,” Ramos admitted. “When the day comes, I’m sure we will all be crying. Wish we could do streaming over here, but it is what it is.” For these workers, the envelopes’ personalities gave them appeal: seeing food stains on envelopes or wear and tear from overuse. 

Since the beginning, these warehouses have remained incognito, with no adornments or announcements labeling the building as part of Netflix. “It was a decision we made very early on,” commented Hank Breeggemann, the general manager of Netflix’s DVD division. “If they knew where we were, we’d run into that problem [of people showing up at our doors]. And then it wouldn’t be a good customer experience. We wanted to mail both ways.”

As this chapter in Netflix’s history comes to a close, it leaves many viewers wondering about the future of the film industry. With DVDs becoming practically obsolete and streaming services multiplying, it’s unknown what the next big innovation in the television world will be. 

(Sources: ABC7, CNN, Netflix, NY Times, Wikipedia)

Categories: Culture, Web Exclusive

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