I need to stop coming online so late, but this is some big news. Mashable reports that Netflix, the DVD and streaming juggernaut, CEO Reed Hastings has announced that the service will be splitting in two with DVD rentals by mail being known as Qwikster while the streaming service being left untouched while keeping the Netflix branding. In a blog post, Reed explains that
We realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently…It’s hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best: In a few weeks, we will rename our DVD by mail service to ‘Qwikster’
This is much of a surprise. If you are one of the million Netflix users out there or you know someone who does, you heard that the company started doing a 60% price hike of both DVDs and streaming. This sparked outrage on the social media and it didn’t bode to tell with investors as well as stock plunged down by 50% with news of the price hike. But that isn’t all and this might be good news, depending on who you are.
Qwikster will be it’s own company, being run by a different CEO and different logo and different website (qwikster.com) with in a few weeks and with that they will add another service: Video Game Rental’s by mail. This was something that Game Fly, another Video Game by mail, had in the bag. But will this be enough to pull Netflix out of the gutter?