Netflix Separates Streaming and DVD Service. DVD Service Called Qwikster, Also Offers Video Games

In a blog post on the Netflix blog, Netflix CEO Reed Hastings announced that Netflix will be officially splitting its streaming and DVD-by-mail services, not just in price this time, and will be renaming the DVD-by-mail service Qwikster, a name chosen because Netflix felt “it refers to quick delivery.” Aside from a name and website change, Netflix assures everyone that Qwikster is the same DVD-by-mail service we’re all familiar with, except with the addition of video game rentals (currently mentioned platforms are the Wii, PS3 and Xbox 360) through the mail alongside DVDs.

The Netflix brand will focus on being solely a streaming brand, something that isn’t much of a surprise, though if Netflix continues to lose oodles of content, one may wonder exactly how the brand will fare. Enthusiasts of both services can sign up for both, though considering the brands will have separate web pages, customers should basically treat the two separate entities as exactly that, and, for example, if a customer wants to change their account information, they’d have to do it once for each website, which will also apply for movie ratings — if a customer rates a movie on Netflix, they also have to rate it on Qwikster. There won’t be a pricing change from the current streaming and DVD-by-mail combination, but there will be two separate statements on a customer’s credit card.

The new DVD-by-mail envelope will retain the iconic red Netflix color, but will slap a Qwikster logo on it where the Netflix logo used to be. Netflix feels that splitting the business will allow them to become better at both streaming and DVD-by-mail, due to the extra focus provided by the split. Some might say the split is the cherry on top of the “Netflix only cares about streaming” sundae, which has been the rumbling from disgruntled customers for some time, but Netflix repeatedly states that the split is so both services can grow, rather than Netflix can stop being identified with DVD-by-mail.

With the addition of video games through the mail, one must wonder how GameFly, the “Netflix for video games” service, feels about the situation and how they plan to combat the new competitor.

In the announcement, Hastings also apologizes numerous times about the way Netflix handled the recent pricing change, in that they didn’t quite communicate with their customers about it. They even released an apologetic video, which can be seen below.

(The Netflix Blog via TechCrunch via Techmeme)