Not long after it began offering streaming, Netflix executives saw the writing on the wall and announced that Netflix would be split into two companies: (1) Qwikster, which would handle the DVD-by-mail business, and (2) Netflix, which would solely stream content. Netflix subscribers became livid, as they were being asked to maintain two different membership accounts and absorb a 60% price increase. Netflix quickly pulled the Qwikster idea (but kept the price increase) but not before 800,000 subscribers ditched Netflix in a single quarter. The DVD-by-mail service has stayed with Netflix ever since.
DVD-by-mail may be a declining business, but it did generate $212 million in profit in 2018. There were still 2.7 million DVD-by-mail subscribers at the end of 2018, so this part of Netflix’s business is likely to hang around for a few more years.