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Netflix Woes Continue; Splitting DVD And Streaming

(Photo by Elizabeth Fuentes/Getty Images for Netflix)

Just when you thought you had a handle on what Netflix was doing with it’s services and pricing structure, comes the news today from corporate headquarters via a blog post from it’s CEO.

Netflix Inc is separating its movie streaming business and its DVD by mail service, which will be called Qwikster, Chief Executive Reed Hastings said in a company blog post.

This news comes as nervous investors have driven the stock price down.

Netflix’s move follows the company’s decision to increase the monthly subscription for a joint streaming and DVD rental service by as much as 60 percent that caused an uproar among customers and bloggers. Netflix shares have fallen sharply since the price increase was announced.

CEO Reed Hastings was quick to assume the blame.

“I messed up. I owe everyone an explanation,” Hastings wrote in a blog post.

 

Hastings said streaming and DVD by mail were becoming two quite different businesses, with very different cost structures. He also added that these two businesses offered different benefits that needed to be marketed differently.

“We need to let each grow and operate independently,” Hastings said.

So will there be more price increases on the horizon?

Hastings assured there would be no pricing changes and members who subscribe to both services would have two entries on their credit card statements, one for Qwikster and one for Netflix. The total amount would be the same as the current charges.

Netflix to split DVD, streaming services – Business – US business – Media biz – msnbc.com.

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