Netflix closing Butte center due to shrinking DVD business

2013-09-19T01:00:00Z Netflix closing Butte center due to shrinking DVD businessBy Renata Birkenbuel of The Montana Standard Montana Standard

Netflix, an online service that made its fortune renting DVDs of films to subscribers worldwide, plans to shut down its Butte distribution center located in the warehouse district on Iron Street.

Competing with instant online streaming of movies has pushed out the physical DVD rental market, but Netflix still has its growing subscriber list of online streamers on which to depend.

Two local management jobs will be lost, according to Joris Evers, Netflix corporate communications director based in Los Gatos, California.

“So it’s very small,” Evers said. “It’s all part of the changing world of streaming. The DVD business has been shrinking. Fewer and fewer people are watching DVDs and getting fewer DVDs in the mail. People want to watch immediately, so they stream.”

Evers refused to say when the Butte distribution center would close. The two soon-to-be-axed jobs require humans, but the envelope-stuffing duties are machine-automated, he said.

Two years ago Netflix tried to separate its DVD mail-order division from its streaming division, but to no avail. But now the numbers speak for themselves, so changes are in the works.

In a 2013 letter to investors and shareholders posted at www.ir.netflix.com, the company reported that at the end of the second fiscal quarter, Netflix had only 7.5 million DVD member subscribers in the United States compared to 29.8 million streaming subscribers/members.

So the customers have spoken loud and clear about which format they prefer.

“A year ago, we had 9.24 million DVD members and 23.9 streaming members,” said Evers. Fast forward to the recent second quarter to see that the drop in DVD members versus increase in streaming members is obvious.

“Streaming is the future,” said Evers, who cryptically said that “a handful” of distribution centers nationwide will shut down.

Although he gave no time frame, he added that Netflix will continue to provide its DVD subscribers “uninterrupted service” via 120 shipping points, including 39 hubs other than the Butte one.

Netflix opened its distribution center in Butte in 2007; in October 2007, it had six employees.

Reach Renata Birkenbuel at Renata.birkenbuel@lee.net and (406) 496-5512.

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(3) Comments

  1. Tutt
    Report Abuse
    Tutt - September 22, 2013 6:34 am
    I never.
  2. butteisthebestplaceonearth
    Report Abuse
    butteisthebestplaceonearth - September 19, 2013 2:39 pm
    Buggy whips are no longer available at your local livery either !
    Antiquated thanks to redbox which is iediaye and bresnan charter

    Was this even mentioned in the baucus show ? Technology and three D printing are job killers. So are great interstate connections to Bozeman shipping and the new Belgrade gallatin airport

    We are shrinking according to the recent forecasts and getting older

  3. LT
    Report Abuse
    LT - September 19, 2013 10:53 am
    I used to get Netflix DVD's in the mail, which is the way that I prefer to watch movies, & it was great that they came from Butte, because the mail time was so fast. I stopped getting them though after the change in the postal service happened. The time it took to get them went from 1 to 2 days to 3 & sometimes 4. It just wasn't a good deal for the price anymore.

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