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How Amazon Shredded the Netflix Red Envelope

Stocks in this article: NFLX AMZN AAPL VZ

PORTLAND, Ore. (TheStreet) -- It took eight years and a whole lot of neglected days in the mailbox, on the coffee table and hidden under the television, but the Red Envelope and I are done. How anyone stays in this failing relationship is beyond me.

I was first introduced to Netflix DVDs by mail in 2006, which technologically speaking is a lifetime ago. I was still making runs to the local Blockbuster, still paying late fees and still buying into an almost completely worthless basic cable package. The first months of Netflix were a gift from my Dad, but the value it offered then made it worth hanging on to.

Now it's an antique. It should have been dropped it in 2011 when Netflix split its DVD and streaming packages and effectively doubled the price of that combination, but Netflix's streaming library wasn't quite sturdy enough to justify dropping the more current DVD selection. Paid subscriptions for Netflix's DVD delivery were more than 14 million at the time of the split. They dropped to fewer than 6.8 million by the end of last year -- compared to 41 million streaming subscribers. Netflix's DVD revenue dropping by $100 million within the last year alone, which dovetails nicely with a $110 million drop in DVD content acquisition over the last two years. Basically, Netflix DVD customers have been routinely punished for holding on to a service Netflix no longer values.

Half of my DVD queue shifted onto the streaming list within that time. Netflix struck deals for the Miramax back catalog and for Disney releases. An archaic, connected Blu-Ray player with only Netflix yielded to a Roku box with Hulu providing next-day airings of Parks & Recreation and The New Girl and Amazon streaming every music purchase I've ever made on that site through its player. Amazon Prime Video's library seemed redundant, but allowed for rentals and occasionally offered some proprietary content like Downton Abbey.

On a weekly basis, Netflix DVDs served as a reminder of just how much they'd been innovated out of relevance. Movies that seemed worth watching when added to the queue weeks before lingered around the house for days because the mood suited comedy or drama more than horror or sci fi. The loading of discs, the interminable previews, the unskippable commercials and the menu interface are all things you'll put up with when pulling an old favorite off the shelf, but not when it's a subscription disc that gets right to the point if you just wait for a streaming version.

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