Most Netflix subscribers received an email at approximately 6:00 AM EST this morning with a subject line that read “An Explanation and Some Reflections.” Who knew that this email would serve as more than just an apology for increasing the service’s prices?
Over the next few months, Netflix will be splitting its business into two different websites. Netflix.com will remain the company’s domain for video streaming. However, the DVD by mail service will fall within a completely new domain and business name. Qwikster (Qwikster.com) will be the arm of Netflix that handles the physical shipping of DVDs and Blu-Ray.
According to Reed Hastings, Co-Founder and CEO of Netflix, this split was done as a way to give the power of faster growth to both autonomous portions of the company. He claims that his team has been afraid and hesitant regarding business decisions, and he concluded that this split would encourage growth and customer reception.
Prices will remain the same. The difference, according to Hastings, is that you’ll have two lines of billing rather than one. Qwikster and Netflix will still add up to the same billable total that Netflix does alone currently.
Hastings slipped one more tidbit into this lengthy apology and explanation: Qwikster will offer Xbox 360, PlayStation 3 and Nintendo Wii games to subscribers that want them. While specific pricing was not announced, Hastings indicated that it would work just like upgrading your account to be eligible for Blu-ray. In order to remain competitive with places like Gamefly, a site dedicated to shipping games, Qwikster will need to price their service right around $15 per month month for one game at a time.
If they make it much cheaper, I’m sold.
Hastings is catching a lot of flak from readers on the Netflix blog regarding news of the company’s split. Most complaints center around the fact that managing two queues over two sites stands in stark contrast to the general purpose of Netflix. That purpose? Convenience.
How do you feel about Qwikster and the addition of Video Game Rentals?