Netflix Streaming Officially Bigger Than DVD Rentals

(Oct. 21) -- DVD-by-mail is officially going the way of Saturday evenings spent perusing the video rental shelves.

For the first time in its history, movie rental giant Netflix is providing more hours of content via Internet streaming than on DVDs, according to the Los Angeles Times blog Company Town. Netflix chief executive Reed Hastings raised the point during his remarks discussing third-quarter results.

"By every measure we are now primarily a streaming company that also offers DVD-by-mail," Hastings said. "DVD-by-mail shipments are still growing, but streaming for us is much larger and growing much faster."

The numbers don't lie. During the third quarter, 66 percent of Netflix subscribers -- compared with 61 percent in the second quarter -- watched at least 15 minutes of content from Netflix online. The California company also added 1.93 million users, bringing total subscribers to 16.9 million, during the latter period.

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It should come as no surprise that Netflix is planning to offer a lower-cost platform for users to forfeit DVD-by-mail in favor of accessing movies exclusively by online streaming. The service, which Netflix hopes to offer by the end of the year, is already available in Canada at a $7.99 monthly rate. If the experiment is a success, U.S. subscribers can expect to pay comparable rates.

Perhaps they're celebrating over at the U.S. Postal Service. The shift away from those pesky Netflix envelopes may signal one less headache for the mail sorters. On the other hand, given the dire financial straits the USPS is in, they're probably mourning the news.

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