The streaming giant Netflix has announced this month that it will finally discontinue its DVD rental service on 29 September 2023. Despite now being the biggest video streaming service in the world, Netflix first began as a DVD rent-by-mail service in 1998, where it found itself at the centre of video rental’s resurgence which, at its peak, generated £15.7bn in consumer revenues; 57% of which stemmed from North America. 

When it launched, the DVD stimulated a resurgence in home entertainment, providing a far better consumer experience than its predecessor, the VHS, and heralding a new digital era (DVD stands for Digital Versatile Disc) for video, in the same way that the CD had done for music a decade previously. This new home video market based on shiny pre-recorded discs pushed VHS rental, and critically recording capability, out of consumers homes and instead moved consumers to purchase movies, rather than rent or home-record.

The injection of cash from this new lucrative format fed a resurgence in global movie production and provided substantial funding to a then-stagnating movie industry. In addition, the introduction of the higher-priced DVD TV boxset helped increase the value of the market further, and saw consumer spending between 2004 and 2008 increase to around $48bn world wide –  more than double the value of the global theatrical market at the time.

DVD sales replaced rental as the predominant form of video consumption, but as retailer-led price declines took hold, the value of the physical video market also declined. The retail and rental market for DVD has since endured a 15 year decline, with many pretenders to the format’s home entertainment crown failing to gain traction among consumers until the emergence of streaming.

Streaming revenues passed the then-declining physical video market in 2016, but only surpassed that of DVD’s peak in 2020. Netflix’s withdrawal of the rental service marks the end of an era for home entertainment.