Netflix Cancels Plans for Separate DVD, Streaming Websites

By Eryn Sun, Christian Post Reporter Tuesday, October 11, 2011

Customer outrage has Netflix backpedaling from their recent decision to split their DVD rental business into two different websites.

On Monday morning, Netflix chief executive Reed Hastings announced the company's plan to forgo their separate streaming and rental websites, a decision they agreed upon just three weeks ago.

"It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs," Hastings penned. "This means no change: one website, one account, one password... in other words, no Qwikster."

Previously, the company wanted to put its DVD rental service on a different website – Qwikster – in order to separate their growing streaming content from their regular mail-in rentals.

The plan would have forced customers to subscribe to two different websites and also hold two different accounts as well, sparking outrage in the already frustrated community with the recent price hike in July.

The proposed separation of streaming and rental subscriptions sites would most likely continue to decrease their value as well, having witnessed a noticeable drop in shares since their earlier changes in July. Additionally, Netflix cut their third-quarter forecast for U.S. subscribers by 1 million.

"Netflix wouldn't have reversed course and suffered the stigma of walking away from Qwikster if they weren't seeing a substantial uptick in their churn rate," Mike Olson, analyst at Piper Jaffray stated, according to Bloomberg.

Admitting that the company was moving a little "too fast," Hastings retreated from the original Qwikster plan and stated, "Consumers value the simplicity Netflix has always offered and we respect that."

"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," he expressed in a statement.

Though the company intended to cancel their September plans, they did not retract from their price changes. "While the July price change was necessary, we are now done with price changes," Hastings affirmed.

Netflix's many changes in the recent months have been the direct result of an increasingly competitive streaming and DVD rental market, with new players like Amazon and Wal-Mart added into the mix, and ongoing pressure to please studios and media companies to keep contracts intact.

Although there has been much instability in the last few months with changing plans and rates, Netflix pledges to continually improve the consumer experience.

'We've recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax," the Netflix Team wrote in an email update to subscribers.

"Plus in the last couple of weeks alone, we've added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS."

"We value our members and we are committed to making Netflix the best place to go get movies and TV shows."

While many customers applauded the company's recent decision to keep DVD rentals and streaming content on one site, some still remained embittered over the other changes that wouldn't be fixed.

"So [you're] still keeping the absurd price increase of 60%??? Guess you still haven't learned,” Juston Hutson commented on the company's Facebook page. Ethan Jewett also shared, "Too little, too late."

"Redbox and Hulu for me since Aug and not missing Netflix," Shawn Ellingson wrote.

Patrick Teague added that there was just one change the company needed to make: Get rid of Reed.

A few customers, however, defended the company's moves.

"As a good capitalist, Tea Party American, I completely understood the need for the changes you all attempted to initiate this summer. It took some getting used to, but in the end I was okay with it all... I think the reaction you all received was ridiculous!" Darla Gaylor said.

Bi Partisan Drudge added, "Netflix is trying, and has been since they started, to make everything better for US and all people can do [is] whine like children. Pathetic. Just pathetic."

"Love you Netflix. Keep up the good work."