Netflix has abanonded its plans to split its DVD and streaming services into two companies, the latest misstep by the formerly admired company.
Just last month Netflix announced it was creating a new company called Qwikster that would handle all DVDs by mail. Only the video streaming would still be called Netflix. But on Monday Netflix sent an email to its customers saying Qwikster is dead before it even got started:
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.
This means no change: one website, one account, one password…in other words, no Qwikster.
While the July price change was necessary, we are now done with price changes.
The "July price change" is what started all of this upheval. Instead of charging people $9.99 for DVDs by mail and streaming, Netflix decided to split it up, charging $7.99 for each service. Customers revolted with up to a million people cancelling their subscriptions.
The company's high-flying stock, which was trading in the $300 range before the price hike, was pummeled -- and is now at around $120 per share.
Some analysts think the split is the first step towards Netflix's eventual abandonment of DVDs by mail, which is much more expensive to deliver than the streaming service.