Netflix Splits Off DVD By Mail Service, Adds Video Game Rentals

Netflix’s CEO, Reed Hastings, has just made the extremely bold move to split his company into two—the Netflix instant streaming service we know and love and the new “Qwikster” DVD-by-mail service. The decision was made due to the very different goals between the two, and will hopefully allow both sides to improve individually without hurting the other. Qwikster will also offer video game rentals in addition to movies and TV shows, and pricing will not change. The websites will be slip apart as well, so if you plan to subscribe to both services, you may be annoyed at the additional work load of managing two accounts.

Some members will likely feel that we shouldn’t split the businesses, and that we shouldn’t rename our DVD by mail service. Our view is with this split of the businesses, we will be better at streaming, and we will be better at DVD by mail. It is possible we are moving too fast – it is hard to say. But going forward, Qwikster will continue to run the best DVD by mail service ever, throughout the United States. Netflix will offer the best streaming service for TV shows and movies, hopefully on a global basis. The additional streaming content we have coming in the next few months is substantial, and we are always working to improve our service further.

Hastings has written an in-depth (and personal) blog post about the move, and has created a short video with Andy Rendich who will be taking on the role of CEO at Qwikster. This is a big move, and will surely cause some controversy—Netflix’s stock has already taken a downward turn following the recent price change and loss of content, so we’ll see what effect this announcement has caused in the morning.


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