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.