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Netflix, Under Fire, Ditches Plans to Split Company, Kills Qwikster

Photo of Anne Thompson By Anne Thompson | Thompson on Hollywood October 10, 2011 at 12:52PM

"Consumers value the simplicity Netflix has always offered and we respect that," said Netflix CEO Reed Hastings as he backed off plans to split the company in two. “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.”
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Thompson on Hollywood

"Consumers value the simplicity Netflix has always offered and we respect that," said Netflix CEO Reed Hastings as he backed off plans to split the company in two. “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.”

Netflix will remain the brand for its DVD-by-mail business and website. Qwikster is no more. Netflix announced today that:

"it will not rename its DVD-by-mail service and that its U.S. members will continue to go to the Netflix website for both unlimited streaming and unlimited DVDs."

UPDATE: The WSJ reports that Netflix is already up 7 % on the news. Full release is below.

Hastings had announced plans to separate Netflix’s DVD and streaming businesses, signaling that the famous red envelope DVD-mailing business was in the past, threatening to drag down his company’s stock price, while streaming was the future, and would continue to thrive and grow. Hastings had planned to give the DVD/videogame rental side the Qwikster name, and keep the Netflix brand for streaming.

The reaction from business analysts, media and customers was resoundingly negative. Many Netflix customers didn't want to service two accounts and lose the depth of Netflix's DVD library, as the streaming side boasts far fewer titles and favors television offerings. Many abandoned their accounts; Netflix looked to lose about a million subscribers.

Dish Network, Amazon and Hulu have been moving to take advantage of customer disapproval of Netflix's perceived missteps.

While Netflix has already lost ground, this move should help to mollify its customers, who, finally, get to keep their queue. And it means that Hastings wasn't necessarily positioning two separate units for possible sale.


LOS GATOS, Calif., Oct. 10, 2011 /PRNewswire/ — Netflix, Inc. (Nasdaq: NFLX) today said it will not rename its DVD-by-mail service and that its U.S. members will continue to go to the Netflix website for both unlimited streaming and unlimited DVDs.

Netflix said in a September 18 blog post that its DVD-by-mail service would operate at Qwikster.com. Instead, U.S. members will continue to use one website, one account and one password for their movie and TV watching enjoyment under the Netflix brand.

“Consumers value the simplicity Netflix has always offered and we respect that,” said Netflix co-founder and CEO Reed Hastings. “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.”

Netflix today informed its U.S. members in personal emails and a post on the Netflix Blog.

This article is related to: Web/Tech, Tech News, DVDs, Netflix, Amazon, Hulu


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