Netflix Cancels Separate DVD-By-Mail Service, Qwikster

Netflix, Inc. (Nasdaq: NFLX) is retreating from the recent decision to separate its DVD-by-mail service and internet-streaming services. Netflix initially said in September 18 blog post that its DVD-by-mail service would operate at Qwikster.com (now re-directed to Netflix.com). The proposed change seemed to confuse and anger many customers, as it would force customers to be billed twice and to search for DVD and streaming content on separate websites.

Today the company admitted that it had moved too fast when it tried to spin-off the old-fashioned DVD service into a new company called Qwikster. Netflix CEO, Reed Hastings, stated “Consumers value the simplicity Netflix has always offered and we respect that. 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.”

On the Netflix blog this morning  Hastings stated, “DVDs will be staying at Netflix.com. It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs. This means no change: one website, one account, one password… in other words, no Qwikster.”

Netflix never actually separated the services or officially started Qwikster, but the announcement that it intended to do so clearly stoked anger among Netflix customers, some of whom were already incensed by a price hike announced back in July.

It is clear that Netflix made some unpopular moves and damaged its relationship with their customer base. We will have to wait and see if Netflix will take this as an opportunity to strengthen the bond with customers.