If you’re among those who are angry with Netflix for creating Qwikster (and who’s not?), good news! Netflix is scrapping its plans to split the DVD service apart from its streaming internet service. The Qwikster plan would have forced current Netflix users to maintain not one, but two accounts (at a 60% price increase!) to keep all aspects of their existing service. Why did Netflix think this was a good idea? Probably for accounting reasons. But what looks good on paper doesn’t always translate to real good in the real world.
Netflix decided to reverse its move after they began dropping subscribers like flies. According to CNNMoney, the company lost over 1 million customers after the Qwikster spin-off announcement, and the company’s stock price dropped a bit as well.
Message Received: Thumbs Down to This Streaming Internet Service
The decision to scrap the Qwikster plans paid off, and Netflix stock jumped 10% after the announcement.
“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 and Blockbuster to compete with each portion of its business separately.”