Netflix splits DVD and streaming businesses; creates Qwikster for DVDs

[WTK]

via TechCrunch.com

Breaking: Netflix Splits DVD And Streaming Businesses; Creates Qwikster For DVDs

Netflix CEO Reed Hastings just dropped a bombshell. In the wake of a rapid decline in Netflix’s stock price last week, Hastings is taking a bold step by separating the DVD and video streaming services. The DVD-by-mail service will now be called Qwikster, and the streaming service will maintain the Netflix brand. That’s right: the new business (streaming) will keep the existing name.

Customers can still subscribe to both, but the two sites will not be integrated anymore. Qwikster will also now offer video game rentals through the mail, a long-requested service. With this move, Hastings is reaffirming his long-held belief that streaming is the future of Netflix and the future of entertainment, and Wall Street can judge its progress by how well the streaming business is doing on its own. Separating the businesses will also force customers to make a choice, and it is obvious which choice Hastings wants them to make (hint: it starts with an “N”). Earlier today, I wrote a post beseeching Hastings not to listen to Wall Street after his stock got hammered. You’ve got to give him credit for moving fast in the direction where he thinks the greatest opportunity lies...

[mitamaking]

And Netflix continues to kill their company. Seriously I expect them on one of those "How did they die" articles at the end of the year next year.

It stinks cause Netflix is such a great provider of anime and obscurish DVDs.

[infjeff]

80% of my Netflix queue was anime. It's an awesome way to watch shows that aren't being streamed. I put my account on hold since I'm away at school, hopefully it will still be around in December...

[samwise]

So why does their 'streaming' service get to be the one that keeps the company's name?

[agila61]

Originally Posted by samwise

So why does their 'streaming' service get to be the one that keeps the company's name?

Because for over two years, its been the growth part of the company. They now need to raise capital on an argument that they are the best positioned to continue growing in the streaming business, because they need to sign new content deals ~ they are losing Starz, several movie distributors have gone the "Hulu" route of joining together to make a common platform with Epix, and if they don't sign new content deals, they are not going to be able to leverage their current position.

But prospective new investors would be worried that instead their money would go to propping up the declining physical media side of the company.

So they split up the companies.

Its not done on the spur of the moment, so clearly the "dividing" of the streaming and DVD subscriptions was done to lay the foundation for spinning off the DVDs by mail business to a separate company.

[WTK]

via Variety.com

Netflix nixes plan for Qwikster

DVD-by-mail to stay with live stream site

Netflix official announcement

In an admission the company may have changed too much too fast, Netflix CEO Reed Hastings said Monday morning Netflix will scrap plans to separate out its DVD mail order businesses under a new name and site called Qwikster.

Last month, Netflix announced its DVD-by-mail service would operate at Qwikster.com. Instead, Hastings said today in an about face, U.S. members will continue to use one website, one account and one password for their movie and TV watching under the Netflix brand.

"Consumers value the simplicity Netflix has always offered and we respect that," said Hastings in a statement. "There is a difference between moving quickly -- which Netflix has done very well for years -- and moving too fast, which is what we did in this case."

The company had already caused an uproar last July with a hefty price hike. It announced plans to start charging $8 a month for both its streaming service and its DVD mail order service, for a total of $16. Previously, mail order was $2 additional if including with the streaming.

Both the price hike, naturally, and the name change, have been unpopular with subscribers and the company's stock has taken a hit.

Netflix said it expects to have 24 million subs at the end of the quarter.

[hissatsu]

I already canceled my subscription to Netflix entirely, but I look forward to watching them do their best to sink the company. Have they made a single decision in the past few months before getting some feedback on the idea? Constantly making very unpopular changes, having to apologize, and having to sometimes undo those changes is probably bad for business. It's certainly been very bad for their stock value.

[Damius]

Well, wonder what is happening with them... I mean, can't they hire someone to tell them they are making only bad decisions lately? Name change always hurts a company...that with the price hike which was way too much?