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As of midnight last night, Hollywood’s writers are on strike. Their demands for better pay and better job security seem like the beginning of the end of this digital chapter in our entertainment industry. I would argue, however, that the true origin point was actually a couple of weeks ago, when Netflix announced in a blog post that it will wind down its legacy DVD rental business this year.
For anyone paying close attention to Netflix’s quarterly earnings, the announcement was not a surprise. DVD rental revenues have declined 40% over the past three years, from $239 million in 2020 to $146 million in 2022. Ten years ago, the business generated $911 million.