4/7/2024 0 Comments Netflix 4k rentalsWe expect the DVD rental contribution margin for Netflix to fall from around 52% in 2017 to nearly 45% by the end of our forecast period. Although small, the DVD rental business is profitable for Netflix. However, Netflix is ensuring that it lures these viewers to its DVD rental business by offering technological conveniences. A small cohort of consumers is likely to opt for this format due to its superior quality. Ultra HD Blu Ray is likely to offer significantly better picture and sound quality that cannot be matched by any other format, a level of quality that has not been seen before. The imminent launch of Ultra HD Blu Ray discs, which have a 4K streaming quality, can revive this market. While we believe that the number of DVD subscribers will continue to decline, it appears that Netflix is now looking at ways to retain and grow this user base. The company separated streaming and DVD services plans in 2011, which led to a good number of subscribers opting for the streaming-only option. Netflix’s decision in 2010 to launch streaming-only services encouraged hybrid subscribers to shift to the streaming-only option, leading to a decline in the number of its DVD subscribers.
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