Netflix does a 180 on it’s decision to split the company into separate online streaming and DVD rental businesses.
According to an email that I received from Netflix today it was apparent that Netflix actually listened to it’s enraged customers that complained about their decision to split the company into two separate businesses. Qwikster was to handle the DVD mail order business and Netflix would retain the streaming video business.
What this would mean for customers was that they would have to login to two separate websites, one to order DVD’s and one to add streaming videos to their queue. What the heck? I’m not sure who it was at Netflix HQ that came up with that idea but apparently it wasn’t a good one.
Netflix was bombarded with customer calls and emails complaining about the decision which in turn prompted Netflix to do an about face and cancel plans to split the company. Since the price of the Netflix service nearly doubled after July 11, their stock price has tumbled. Shares of Netflix have fallen from almost $300 the day before the price changes to about $111 at closing today.
Netflix has stated that they expect to shed 1 million of its 25 million customers as a result of the pricing changes. In order to stop the hemorrhage of subscribers Netflix needs to turn things around quickly by adding a serious quantity of great movie titles and adjust the pricing to return the service to that of which made it a great entertainment value. Can they do it in time?