Netflix CEO Reed Hastings took to his Netflix blog to announce the company is splitting its DVD-By-Mail and Streaming services into two separate companies. I can't for the life of me see how this is of any benefit to customers but he seems to think its a novel idea. He is calling it an explanation and an apology for not communicating the staggering price hikes that have resulted in a predicted mass exodus of their company (Netflix is predicting an expected subscriber dip of 1 million).
The new DVD service has been named Qwikster (due to the speed of delivery) and will be adding video game rentals for an additional charge. The streaming service will remain under the Netflix name and is expected to have a wealth of new content added this fall. The red envelopes will remain as well.
The companies and sites will be completely independent of each other. Your ratings will not appear on both sites. Your Queues will be on separate sites. You'll have two separate charges on your credit card if you choose both options.
I can't for the life of me see the point of this. Hastings says it is to allow each service to grow as needed but I don't really buy that. There can't be much life left in the DVD-By-Mail service especially with the woes of the Post Office getting worse and worse. Separating the services and having customers who do choose to use both services have two different websites to deal with seems just foolish to me.
There is also nothing addressing the astronomical price increase.
I think this is a bad move for Netflix. Not just bad but worse, pointless.
What do you think? Is this a good idea? I can't get past the "Why?" myself.
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