This was during the era before streaming services became the norm, when Netflix was still brand new, they actually started by sending physical discs before launching their streaming service existed. You rent a copy and a disc is sent to your home within a few days but there's a written letter telling you have to return it by a certain date otherwise they'll charge extra.

That copy isn't yours to keep, so what ends up happening during those days were people using blank DVD's alongside their PC and DVD burning software to pirate the content from movie rentals (also DVDrips existed, but those file sizes are massive during dial up internet being broken up into .VOB / .BUP in a folder or outright converted into an large .ISO file).

It was either DVDrip (.mkv) or literally copying onto a blank DVD. VCD's are an alternative for compression but sacrifices quality as a CD is designed to hold music rather than video. DVD ripping software exists, but you need heaps of storage on PC to hold thos