Netflix Says It Won't Separate DVD, Streaming Services
Netflix announced on Monday that it is backtracking on its controversial decision to separate its DVD and streaming services.
"This means no change: one website, one account, one password… in other words, no Qwikster," said chief executive officer Reed Hastings in an announcement on Netflix’s blog. “While the July price change was necessary, we are now done with price changes."
In July, Netflix took a bold step toward making streaming its dominant rental method by announcing with little explanation a new pricing plan that separates DVD rentals and movie streaming into separate accounts, unless customers pay more. The news rubbed many of its loyal subscribers the wrong way.
"It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes," Hastings said in a statement and video message to its subscribers in September. "That was certainly not our intent, and I offer my sincere apology."
Hastings explained that he feared Netflix wouldn't make the leap from success in DVDs to success in streaming and announced last month that it would be renaming its DVD-by-mail service Qwikster.
"I messed up," Hastings said. "I owe you an explanation… we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently."
Subscribers were still less than happy to embrace the concept of Qwikster, with many reacting to the news on social networking sites including Facebook and Twitter. [Read: Mind-Boggling Facts About Social Media]
Previously, the basic Netflix subscription provided DVD rentals (one disc at a time) and unlimited streaming viewing, with more expensive options available for two discs or Blu-rays. Unlimited streaming became a subscription by itself at $8 a month, and single-disc subscriptions became $8, but did not provide streaming access.
Customers could still subscribe to plans that provided both DVDs and streaming, but they started at $16 and up. For those who only wanted to stream or use DVDs, it made the Netflix subscription a bit cheaper, which Netflix said was one of the reasons behind this decision.
In his latest announcement, Hastings noted that the company will be folding its DVD-by-mail service back into Netflix. He also emphasized that it will continue to improve its streaming selection — adding hundreds of movies from various studios and TV networks, including ABC, NBC, Nickelodeon and The History Channel — and that it would be folded back into Netflix.
"We value our members, and we are committed to making Netflix the best place to get movies and TV shows," Hastings said.