Netflix Aborts Qwikster
Responding to the continuing outcry and subscriber losses resulting from his announced plans to separate Netflix's streaming and DVDs-by-mail services, Netflix chief Reed Hastings announced today (Monday) that the company had decided to abandon those plans. There will be no Qwikster. Instead, said Hastings in a blog post, "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." In a kind of mea culpa, Hastings added, "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, however, did not abandon the change in pricing. It will still cost $8.00 a month to stream movies, $8.00 a month to receive them by mail, or $16.00 a month for both. For subscribers who want both, that amounts to a 60-percent boost in their monthly fees. In an interview with the Wall Street Journal, Wedbush analyst Michael Pachter said, "It's clear they were losing customers, and I'm surprised the backtrack took so long. ... They have a lot of explaining and a lot of repairing to do with customers." Tony Wible, of Janney Montgomery Scott, told MarketWatch.com that the company was now operating in "desperation mode." Netflix shares, which had plummeted nearly 40 percent following Hastings's original announcement, were up 3.72 percent to 121.57 at midday trading on the Nasdaq.