Netflix Drops Qwikster DVD Service, Game Rentals "to be Determined"

Netflix angered many customers over the summer when it raised the price of a popular plan that provides access to online streaming and DVDs. This prompted a great deal of members to unsubscribe from Netflix altogether, and this was only made worse when the company announced last month that it was splitting off its DVD-by-mail business to a separate website with a different name: Qwikster. This would leave Netflix to be streaming-only. The company has now done a 180; with such a negative outcry over all this, it announced today it will not be splitting up the two businesses -- it will, however, be maintaining the price increase.

An email was sent out to members today informing them of the decision to not make the change. A brief blog post from Netflix CEO Reed Hastings has also been published which makes the news official. It reiterates there will be no further price hikes and that killing the poorly-named Qwikster "means no change: one website, one account, one password... in other words, no Qwikster."

"Consumers value the simplicity Netflix has always offered and we respect that," said Hastings in a statement sent to the New York Times. "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."

"We underestimated the appeal of the single Web site and a single service," added Netflix spokesman Steve Swasey. "We greatly underestimated it."

While the existing DVD service will remain unaffected, the fate of videogame rentals -- which were to be introduced with Qwikster -- is not so certain. The announcement last month was unspecific about how these rentals would work except that they would cost an additional monthly fee, similar to how access to Blu-rays currently works. Swasey told the Times plans are "to be determined," so you may want to hold onto that GameFly subscription for the time being.

Netflix's stock price has been declining since the September 19 Qwikster announcement, though the drop began days earlier when it forecasted a decline of 1 million subscribers thanks to the price increase. With today's news, the stock price jumped up almost $10; it's dropped somewhat since then but is still up nearly 5 percent as of this writing.

Source: http://www.1up.com/news/netflix-drops-qwikster-dvd-service-game-rentals-tbd

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