News Column

Netflix Morphs Again, Splits DVD Biz into 'Qwikster'

Sept. 19, 2011
Netflix Splits, DVD business, becomes Qwikster, REED HASTINGS

Reed Hastings, the co-founder and CEO of Netflix (Nasdaq: NFLX) , took to the company's blog yesterday to announce some major changes to the Netflix movie delivery service--and to apologize for how the company handled its last major change, when it decoupled the DVD delivery service from the movie streaming service.

The first major change is a further decoupling: the DVD service will spin off into its own company, which will be called Qwikster. Hastings explained:

"... 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. ... We chose the name Qwikster because it refers to quick delivery. We will keep the name 'Netflix' for streaming."

Hastings identified Andy Rendich, a long-time Netflix employee who's been leading the DVD service for the past four years, as Qwikster's CEO. The two together posted a "welcome" video (see below), which YouTube users are giving a resounding "thumbs down"--1,000 dislikes to 265 likes at the time of publication.

The other major change is the addition of an interesting feature to Qwikster's service: that of video game delivery in addition to DVDs; Wii, PS3, and Xbox 360 games will be available via mail for an additional fee.



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