The past few months haven’t been going so well for our friends in red. With the news of a price hike announced during the summer, complemented with Starz’ decision not to renew their services, Netflix has seen better days. The aftermath of the situation has been alarming, to say the least, as Netflix is predicting a loss of one million customers for this fiscal quarter. Finding humility in the disastrous situation, the Netflix CEO and co-founder, Reed Hastings, has written a blog post to address concerns, clarify some confusing statements, and to also announce a new service.
Hastings explains the rationale behind the separation between streaming and DVD services, claiming that the two have grown to be two very different businesses. With the push towards digital, on-demand services growing over the past couple of years, this is the nature of the beast, and as such, Hastings did what he felt was necessary. In separating the two services into two separate plans, Netflix itself is now splintering into two distinct services: Netflix for streaming services, and the recently announced Qwikster for DVD service.
More on this below the jump.[via The Netflix Blog]
Essentially, the new service will be exactly how the current DVD structure exists on the Netflix website. However, as the two services split from one another, some changes will be made. First and foremost, accounts will be separated from the two. While prices won’t be changed, if you’re currently subscribed to both a DVD and streaming plan on Netflix, you’ll receive two separate charges: one from Netflix and one from Qwikster. Furthermore, reviews and ratings will be separate between the two websites, which might be a bummer to some. In light of all this change comes a blessing for gamers, however, as Hastings also announced the plan to include video games with Qwikster’s services. Much like the additional charge for Blu-Ray movies, an extra charge will be added to your plans to allow game rentals, quickly establishing Qwikster as a direct competitor to GameFly.
Has Netflix come to a point where the distinct separation between the two services warrants a whole new brand to be established? While Hastings claims this is so each company can focus solely on their respective services for 100% commitment, is it something you really believe in? Or were you off the Netflix bandwagon the moment the price hikes were announced? Sound off in the comments, or if you feel so inclined, write a cBlog condemning/applauding this new direction.