Netflix to Split DVDs & Streaming Video into 2 Companies

The CEO of Netflix posted an apology letter on the Netflix blog last night where he explained why Netflix had started charging more for the same service it had always provided.

As he saw it, the DVD and streaming services were growing more and more into 2 separate services that needed to be run independently. The first step was to split the fees, which is why the base price went up from $10 to $16. And the next step is to completely split the services into 2 companies.

DVDs are going to be spun out into Qwikster, a new company. If you currently have a combined DVD and streaming service from Netflix, one of the services will be moved over and you’ll see 2 charges on your credit bill.

The search function, queues, and everything else that you might use to find movies to watch will also be split between the 2 sites. This means it will be a lot harder for someone to find a DVD and then check to see if it’s available for instant viewing.

Speaking as a Netflix customer, this is truly an unfortunate move on the part of Netflix management. It was bad enough that they foisted a 60% price hike on me a few weeks ago, but now they want to split the service into 2 websites?  I have to wonder why they decided to make the service less convenient and more expensive at the same time.  One has to wonder if this is an attempt to kill the company, because it’s clearly not designed to please customers.

Publish date: September 19, 2011 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT