Automating the End of Movies on Physical Discs

Netflix Envelope Photo by Marit & Toomas Hinnosaar, Flickr

No one pays attention to Netflix’s discs-by-mail business anymore but for those who are curious, the subscriber base continues to decline steadily and the company’s operations have shrunk from a peak of fifty distribution centers across the United States to just seventeen remaining. Some projections show the division winding down as soon as 2025, but it’s also worth noting that in the meantime its profit margins continue to grow.

That’s probably thanks in no small part to efficiencies like “The ARRM,” or the Automated Rental Return Machine, a robotic disc-processing machine that intakes countless returned Netflix envelopes, extracts their contents and repackages the discs for mailing to new customers. It’s pretty fascinating to see in action, as this video demonstrates.

That video was produced by Netflix’s marketing department and so it has an elegant sheen to it. If you want to get a better look at the ARRM in action, this decidedly more prosaic video from Bronway, the automation vendor who created it for Netflix, is also fascinating. It offers more detail on how efficiently—almost ruthlessly—the machine executes its tasks.

There doesn’t seem to be a lot of human intervention necessary with the ARRM, which makes it sort of interesting—maybe sad, maybe scary?—to think of how Netflix has basically built a robot to serve a dwindling population. In a very real sense, they’ve optimized the profit margins for a dying customer segment. It’s the end of the world as they know it, and they feel fine etc.

I’m one of those holdouts who still subscribes to discs by mail, mostly because my appetite for films you can’t watch on streaming services is pretty high. Still, even I can see that the writing is on the wall for this service; a couple of years ago I downgraded from the two discs-per-month plan to one-per-month, and not long after that I got in the habit of pausing my subscription during summers or periods when I knew I’d be traveling extensively.

Even if the shuttering of Netflix’s DVD service won’t be exactly the same as a final nail in the coffin for disc media, it’ll still be meaningful. Netflix buys tons of physical media; once it stops doing that, the economics of movies on disc will only get worse.

The real shame will happen when movies stop coming out on DVDs and Blu-Rays altogether. That’s not because they were such a lovable way to package films (they have their pluses and minuses); it’s because with the loss of each media format, we also lose some titles forever. The list of movies that never made it from VHS to DVD is not insignificant. Usually these “lost” titles are somewhat obscure, but even a major film like “Air Force One” can get lost in the shuffle. As this Collider story recounts, even though that movie is available in a recently pressed Blu-Ray edition, it isn’t available to stream—not just from subscription services like Netflix and Hulu, but it’s not available to rent from iTunes or Amazon, either. It’s hard to say how many more titles we’ll lose when you can only watch movies online, but it’s something to think about as we so eagerly embrace that future.

Photo: Marit & Toomas Hinnosaar licensed under Creative Commons Attribution 2.0 Generic