Remember when Netflix used to be a DVD-by-mail company? Well, for 2.7 million subscribers in the US, it still is.
The familiar red envelopes have been arriving in customers’ mailboxes since 1998 and helped earn the company a healthy $212 million profit last year.
Why are so many people still using this old-school service in the age of streaming? There are a number of reasons.
Streaming Netflix video requires a lot of bandwidth — so much so that Netflix consumes 15% of all US internet bandwidth, according to a 2018 industry report.
But many rural areas of the country remain without broadband access. The Federal Communications Commission estimates 24 million Americans fall on the wrong side of this digital divide.
The US Postal Service, however, can reach every ZIP code with those red envelopes.
One such customer is Dana Palmateer, who lives in the Black Hills of South Dakota.
“Streaming movies was a no-go, so I just went with the disc service that Netflix offers,” she says. “As all of us are doing it in these parts.”
But Netflix also has plenty of DVD customers in urban areas who prefer the service for its convenience and selection of movies, spokeswoman Annie Jung says.
“People assume that our customers must either be super seniors or folks that live in the boonies with no internet access,” she says. “Actually, our biggest hot spots are the coasts, like the Bay Area and New York.”