Netflix splits DVD and streaming service

Screengrab of Qwikster homepage, BBC Qwikster will be the name for Netflix's DVD by post rental service

Related Stories

Netflix has decided to split its DVD-by-post business from its movie streaming service.

The streaming service will keep the name Netflix but the postal DVD rental business will be renamed Qwikster.

The announcement comes two months after US firm Netflix bumped up the price of the combined renting and streaming service by 60%.

The price hike is thought to be behind the sharp drop in subscriber numbers Netflix has seen.

In July, Netflix reported that it had about 25 million subscribers. In an earnings report last week it said it now expected subscribers to number 24 million at the end of September.

Start Quote

I messed up”

End Quote Reed Hastings Netflix boss

The news caused shares in the firm to drop 19% which brought the total decline in its share price to almost 50% following the July price rise.

Netflix boss Reed Hastings took to the company's blog in a bid to calm the ongoing furore by explaining its reasoning behind the changes.

He said problems had arisen as Netflix evolved from the DVD rental business that spurred its initial growth to a company in which most of its customers were streaming movies via the web.

"...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," Mr Hastings wrote.

This was the reason it split DVD rental and streaming into separate businesses and charged for both, he said.

After the split, customers will be charged for each service they use and their bank and credit card statements will show separate payments. In addition, any feedback they give on good or bad movies via one service will not be mirrored on the other.

"Arrogance" based on past success meant the company neglected to keep its customers informed, he said.

"I messed up," he wrote. "I owe everyone an explanation."

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Technology stories

RSS

Features

  • NS Savannah, 1962Nuclear dream

    The ship that totally failed to change the world


  • Irvine WelshScots missed

    Five famous Scots who can't vote in the Scottish referendum


  • Espresso cup7 days quiz

    Which city serves the strongest cup of coffee?


  • Glasgow 2014 quaichs and medalsQuaich guide

    What do the Scottish gifts given to Games medallists symbolise?


  • Malaysian plane wreckage in UkraineFlight risk

    How odd is it for three planes to crash in eight days?


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.