You sure this is a licensing thing? Maybe they are just putting spin on it, but it sounds like they are saying they were taking a loss on the DVD side of things (or just making minimal profit) in anticipation of DVD's going away, and have discovered DVD's aren't going away as fast as they planned.
I mean, really, post is something like $0.40 these days. Unless a postal service gives them a price break, the $2 DVD fee is entirely consumed by the cost of mailing you (and you sending back) 2.5 DVD's per month.
> and have discovered DVD's aren't going away as fast as they planned.
I think they are being dishonest about their "bafflement" over the persistence of DVDs. I think the real reason is the quality of their streaming collection. There a few gems but it is filled with a lot of sub-par, unwanted, titles. I for example, have watched all the streaming videos I want for a while. Now I am just waiting for the new ones to appear and watching real DVDs I get in the mail.
But to give them the benefit of the doubt, it would be interesting to see how they determined that streaming just isn't that popular. They could have judged by the total # of subscribers that have ever setup or watched a streaming title? The best way would be if they focused on titles offered both in streaming and non-streaming form, then investigated which form people actually choose.
Definitely agree that it's easy to burn through the good streaming material and hit a roadblock where it's only worth checking news additions. I think in addition to that, there are certain people that still go online on Sunday/Monday to order a physical DVD for the next weekend: namely my parents.
I got a Roku for them a few years ago to make it easier for them to stream. Last time I was there I noticed it was gone. When I asked about it they said that once they got a new TV they didn't really want to set it up and gave it to my sister (I didn't take any offense, and at least it's being used now).
I actually enjoyed it since it was a good reminder of how everyone has a threshold for the new/innovative/convenient vs. the familiar/comfortable.
This doesn't change the crux of your comment, but the post office does give them a price break; in fact it gives everyone a price break, all you have to do is sort your mail by zip code.
The way it works is if you send enough mail to the same zip code, then you pay a certain discount (a few cents per mail piece) if you package all of that mail together. The amount of the discount varies depending on if you sort by 5 digit zip code, or just 3 digit zip code prefix.
I mean, really, post is something like $0.40 these days. Unless a postal service gives them a price break, the $2 DVD fee is entirely consumed by the cost of mailing you (and you sending back) 2.5 DVD's per month.