Netflix abandons plan for Qwikster DVD service
Netflix kills plan to separate Qwikster, streaming services
"... U.S. members will continue to use one website, one account and one password for their movie and TV watching enjoyment under the Netflix brand," the company said in a statement.
..."Consumers value the simplicity Netflix has always offered and we respect that," Netflix co-founder and CEO Reed Hastings said. "There is a difference between moving quickly -- which Netflix has done very well for years -- and moving too fast, which is what we did in this case."
The company had already lost an estimated 1 million customers, or about 4% of its subscribers, after Netflix split its DVD and streaming businesses in July, effectively raising prices on subscribers of both by 60%.
..."Basically, these guys are desperate, and this confirms it," said Tony Wible, analyst at Janney Capital Markets. "While this move doesn't solve the company's long-term issues, in the interim, at least it can try to accelerate some positive catalysts for customers and its stock price."
Shares of Netflix (NFLX) rose 7% following the news.
For investors, the problem with spinning off the DVD-by-mail service is that it accounts for between one-third and one-half of the company's overall sales, depending on which analyst you ask. (Netflix doesn't break out those statistics in its earnings releases).
..."Netflix has a major leg up on its competition, because it offers library titles via streaming and any title with a two-day delay through the mail," said Brett Harriss, analyst at Gabelli & Co. "By separating them, Netflix would have allowed Apple (AAPL, Fortune 500) and Blockbuster to compete with each portion of its business separately."
For consumers, the Qwikster spin-off would have been a royal pain: Customers would have needed to maintain two separate accounts on two different websites.
Netflix, a company that could do no wrong up until this summer, seems to have heard those customers loud and clear after its second blunder.
"Netflix is the latest poster child for what happens when you aggravate consumers," said Tobe Berkovitz, professor of advertising at Boston University. "When you have a brand that consumers have a good relationship with -- and Netflix was certainly one of those -- consumers take a ton of flesh if you betray them." 
http://money.cnn.com/2011/10/10/technology/netflix_qwikster/index.htm?hpt=hp_t1
http://money.cnn.com/2011/10/10/technology/netflix_qwikster/index.htm?hpt=hp_t1Netflix Wallpaper
Culture Buzz 150 Netflix envelopes and counting, one woman is turning her laundry room into an ode to her rentals by mail. Sure, this may seem like a clever project, but what if we were to tell you that every one of those envelopes concealed a rotation of Big Momma's House and Battlefield Earth? Huh? Then what would you think? (Probably that it's still awesome.)
Netflix drops unpopular Qwikster DVD plan
By Lisa Richwine
(Reuters) - Netflix Inc Chief Executive Reed Hastings reversed an unpopular decision to separate his company's DVD rental business and online video streaming service, sending the stock up 7 percent in early trading.
....Writing on the company blog last month, Hastings said Netflix was putting the DVD service on a different website and naming it Qwikster as the company separated the business from its growing online streaming offerings. The move would have forced customers of both streaming and DVD options to visit different websites and maintain different accounts for each subscription. Customers also would have received separate credit-card charges.
The announcement prompted confusion and outrage from customers who fumed on the Netflix blog and Facebook page, plus bewilderment over the move to the Qwikster name for DVDs sent through the mail in the company's signature red envelopes.
"The subscribers voted and Netflix realized the whole thing was stupid," said Charlie Wolf an analyst at Needham & Co. "It was an act where you didn't raise prices but you lost subscribers."
In a statement issued on Monday, Hastings said "there is a difference between moving quickly -- which Netflix has done very well for years -- and moving too fast, which is what we did in this case."
"Consumers value the simplicity Netflix has always offered and we respect that," Hastings said. Continued...
http://ca.reuters.com/article/technologyNews/idCATRE7992EB20111010
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