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"Netflix CEO Reed Hastings has announced that Netflix will be splitting its DVD and streaming video businesses and rebranding the DVD division to win back the trust of its customers.\n\"We realized that 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,\" Hastings explained in a blog post. \"It\u2019s hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best: In a few weeks, we will rename our DVD by mail service to 'Qwikster'.\"\nNetflix has been under fire ever since it announced a price hike for its DVD and streaming video services. The change, which bumped the price of the streaming and DVD plan by 60%, was met with a social media revolt, resulting in Netflix cutting its customer forecast by 1 million.\nNetflix stock has lost nearly 50% of its value since it made the price announcement in July.\n\"In hindsight, I slid into arrogance based upon past success,\" Hastings admitted in his candid apology. He explained that his greatest fear was that Netflix \"wouldn't make the leap from success in DVDs to success in streaming.\" Thus he decided to make agressive moves into the streaming space to the detriment of Netflix's DVD business. Confused and frustrated consumers didn't respond kindly to the changes.\n\"Now I see that given the huge changes we have been recently making, I should have personally given a full justification to our members of why we are separating DVD and streaming, and charging for both,\" Hastings added.\nQwikster will be run as its own separate entity. Netflix has named Andy Rendich, formerly the company's chief service and operations officer, as Qwikster CEO. Netflix's DVD by mail service will move to Qwikster.com in the next few weeks and feature the Qwikster logo on all of its packaging (though the red envelopes will remain). The company will also be offering a new service: video game rentals.\nWill this quell customer dissatisfaction and restore their trust in Netflix? Only time will tell, but Hastings had to do something to reverse customer anger and stop Netflix's stock from falling any further. It took too long to make this move, but it was the right thing to do. Netflix and Qwikster have a long road ahead.\nUpdate: following the blog post, Hastings answered some of the criticism of Netflix's new direction in the post's comments section .\nOne commenter asked, \"You thought a good idea to make up for miscommunications was to separate the websites and make it more complicated for us to manages our queues? Really?\" In response, Hastings said, \"We think the separate websites (a link away from each other) will enable us to improve both faster than if they were single websites.\" Hastings added that some more explanations on how the two sites will work. \nWhen asked about the two services having separate ratings and reviews, Hastings clarified, \"At least when you start, your current rating and reviews will be in both.\" \nResponding to a question about two services having two separate queues, Hastings said, \"We already have two queues. The two 'sites' are a click between each other, so we think not that much different than two tabs on one site.\"\n\n\n\n\nBONUS: Chronicling Netflix's Downturn, July to October 2011\n\n\nChronicling Netflix's Collapse\n\n\n\n\n\n\n\n1. Netflix Stock Hits All-Time High\n\n\nJuly 13, 2011\nNetflix stock more than doubled over the previous year, then increased by 15% in May to reach its last all-time high in July of $300.\n\n\n\n\n\n\n\n\n\n\n\n2.. Netflix Price Hike Takes Effect Today\n\n\nSept. 1, 2011\nNetflix cancelled its $9.99 combined streaming and DVD plan and separated the services into two separate $7.99 plans.\nPhoto courtesy of Flickr, matthew393\n\n\n\n\n\n\n\n\n\n\n\n3. Netflix Has Lost Half Its Value in Two Months\n\n\nSept. 19, 2011\nThe stock dropped 50% from its July 13 all-time high.\nNetflix Price Stock Chart by YCharts\n\n\n\n\n\n\n\n\n\n\n\n4. Netflix Apologizes to Customers &amp; Rebrands Its DVD Service\n\n\nSept. 19, 2011\nNetflix CEO Reed Hastings introduced Qwikster, the company that would take over its DVD service.\n\n\n\n\n\n\n\n\n\n\n\n5. Netflix Abandons Qwikster DVD Plan\n\n\nOct. 10, 2011\nRecognizing that Qwikster would end up \"making things more difficult\" for its customers, Reed Hasting announced that Netflix will forego DVD rebranding.\n\n\n\n\n\n\n\n\n\n\n\n6. Netflix Loses 800,000 Customers in Quarter\n\n\nOct. 24, 2011\nBy Monday Oct. 24, over 805,000 Netflix customers had cancelled their subscriptions due to the company price hike.\nImage courtesy of Flickr, Ross Catrow\n\n\n\n\n\n\n\n\n\n\n\n7. Netflix Stock Plummets 27% Following Earnings Report\n\n\nOct. 24, 2011\nDown to $85 share price from $300 this summer, Netflix's stock fell 27% following the announcement that it had lost 800,000 customers.\nNetflix Stock Chart by YCharts\n\n\n\n\n\n\n\n\n\n\n\n8. Netflix Stock Falls 37% as Subscribers Depart\n\n\nOct. 25, 2011\nBy premarket trading Tuesday morning, Netflix stock had fallen another 10% since the evening before.\n\n\n\n\n\n\n\n"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2011/09/19/netflix-qwikster-apology/>