Netflix Pulls Back on Plan to Split Mail, Internet Services

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Netflix is reversing a course that would have split up its DVD-by-mail and Internet streaming services, as media reports indicate that the company will now keep the two services on a single website.

Earlier this year, Netflix announced it planned to separate the two services, but a combined outcry from both consumers and investors apparently were heard so loudly that the company shifted gears.

“Customers had complained loudly that the plan would have made it more difficult to watch movies. Investors hated it, too,” the Associated Press reported Tuesday.

Netflix said in a Sept.18 blog post that its DVD-by-mail service would operate at Qwikster.com, at which time Netflix CEO wrote, “Companies rarely die from moving too fast, and they frequently die from moving too slowly.”

But Hastings decided the move was too hasty after all.

“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,” according to a company statement issued Oct. 10.

But the drastic change – and several others in a relatively short period – has evoked questions about the company’s management style, even becoming fodder for Saturday Night Live skits and targets for disenchanted customers on social networks.

While “Hastings had always seemed to possess an uncanny touch,” the AP said, “…The series of missteps has stirred doubts about his leadership at a time when the company faces wrenching industry change and ferocious competition.”

Hastings issued a mea culpa this week, noting the difference between “moving quickly” and “moving too fast.”

“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,” Hastings said in a statement.

Netflix informed its U.S. members of the change in personal emails on Oct. 10 and a post on the Netflix Blog.

Last month, Netflix announced it was lowering its U.S. subscriber expectations for the third quarter because it anticipated customer losses relating to the company’s split in July of its DVD and streaming options (which effectively raised prices for existing customers who both receive DVDs by mail and use the streaming option), TechZone360 reported.


Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Carrie Schmelkin
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Executive Editor, Strategic Initiatives

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