Netflix is ending its DVD-rental service after 25 years. Here's how the company grew into a Hollywood disruptor with over 230 million subscribers.

In his book "That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea," Randolph wrote that he and Hastings met with Bezos in 1998, who offered them "probably something between $14 million and $16 million," Randolph wrote. But they turned down the offer.

Netflix gained 239,000 subscribers in its first year, according to Inc.

"As you get older, if you're lucky, you realize two things: what you like, but also what you're good at," Randolph told Forbes in 2019 on why he left Netflix. "The answer to both of them [for me] is early-stage companies. I like the chaos. I like the fact that you're working on hundreds of things at once."

Netflix ended 2006 with over 6 million subscribers for its DVD-rental service.

But a New York Times story at the time highlighted how the company still faced doubts about its streaming plans, noting that it would cost Netflix $40 million to implement it. The company's stock dropped 6% with the announcement. But Hastings, who was CEO at the time, said that he had "gotten used to" reservations.

"This was the first time we streamed a show across multiple countries and languages … and it worked," Netflix's current co-CEO Ted Sarandos wrote in a blog post in February 2022.

"It worked because it was a deeply local story that we could share with the world," Sarandos added.

Netflix has yet to nab the Oscars' top prize, though, despite elaborate campaign spending. Apple TV+ won best picture last year for "CODA," becoming the first streaming platform to do so.

Chappelle said in the special that "gender is a fact" and defended "Harry Potter" author J.K. Rowling, who came under fire for past transphobic comments.

Sarandos defended Chappelle in a memo to employees, saying in part: "Chappelle is one of the most popular stand-up comedians today, and we have a long standing deal with him. His last special, 'Sticks & Stones,' also controversial, is our most watched, stickiest, and most award winning stand-up special to date."

Netflix trans employees planned a walkout in response to the special and Sarandos' comments.

Aside from the economic strains of the coronavirus pandemic, Netflix blamed the subscriber loss partly on password sharing. It said that it estimated that an additional 100 million people use Netflix with a shared password. 

It also acknowledged increased competition. Over the last few years, new streaming services like Disney+, HBO Max, Paramount+, and more have entered the space on top of already existing rivals like Hulu and Prime Video.

Hastings confirmed during Netflix's April 2022 earnings call that the company plans to roll out an ad-supported plan — something it has pushed back against in the past — as the streaming service faced slowing revenue growth and lost subscribers.

Other streamers have, like HBO Max and Paramount+, have embraced ads. Disney+, Netflix's biggest rival, has also launched an ad-supported option.

Netflix's standard HD plan (its most popular plan) is $15.49 per month after the company recently raised prices. 

Netflix laid off 150 staffers in May 2022 and then 300 more in June.

"While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth," a Netflix spokesperson said of the most recent round of layoffs.

In Q2 2022, Netflix said it lost 970,000 subscribers. It had forecasted losing 2 million subscribers in the quarter, so it beat expectations — but it was still a sign of company's struggles, proving why it is introducing an ad-based plan and cracking down on password sharing. 

Netflix is optimistic about Q3, though, and forecasted adding 1 million subscribers.

When the ad program launched, the streamer said it was nearly sold out of inventory.

The end of 2022 represented a bit of a bounce back for Netflix, as the entertainment company outpaced subscriber growth in Q4 by around 3.1 million, adding 7.66 new subscribers despite its own estimates of 4.5 million, per Variety.

In total the streaming giant amassed 230.75 million subscribers by the end of 2022, compared to its target figure of 227.59 million.

Netflix noted that after a decade into making original content, it was "past the most cash-intensive phase of this buildout," per Variety. Accordingly, money spent on content was $16.84 billion in 2022 — about a 5% less than its 2021 spend.

Netflix announced it will end its DVD-rental services on September 29, 2023, according to an official Twitter account dedicated to the DVD-side of the business. It will mark the end of a 25-year chapter for the business, which became known for its red envelopes.

Users will have until October 27, 2023 to return their DVDs. Those still subscribed to the DVD service or whose subscription was cancelled in the last nine months will be able to download their queue, rental history, ratings, and reviews via this link.