Monday, October 10, 2011

Qwikster Becomes Quicksand to Netflix: Company Abandons Split of DVD Rental & Video Streaming

Image representing Netflix as depicted in Crun...Image via CrunchBaseNetflix, once-admired for its business acumen and streamlined operation that enabled it to topple Blockbuster and other video competitors, nowadays evokes comparisons to the bumbling video store clerks played by Jack Black and Mos Def in Be Kind Rewind (2008).

Less than three weeks after Netflix announced it was dividing its operations into separate subscriptions for Netflix, which would stream movies, and Qwikster, which would rent DVDs through the mail (see "TUOL" post 9/21/11), The New York Times reports today that the company will keep the two operations together under the Netflix name and Website.

The bold corporate decision to say: "Never mind," follows a firestorm of criticism and an estimated 1 million users out of the company's 25 million subscribers jumping ship to protest the lack of notice and the boost in the monthly subscription rate from $10 for the two services to a proposed $16, or $8 apiece, for Netflix video streaming and Qwikster DVD mailing.

Although he declined to be interviewed, the Times article reported a statement released by Netflix chief honcho Reed Hastings, who distinguished between "moving quickly--which Netflix has done very well for years--and moving too fast, which is what we did in this case."  It remains to be seen whether subscribers, happy that the company wouldn't be split into two entities, will nonetheless absorb the higher $16 monthly subscription fee, which has not been rolled back.

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