Netflix (NFLX) to Separate DVD, Streaming Businesses; CEO Hastings Apologizes
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Netflix (Nasdaq: NFLX) is reeling from it's recent price hike backlash.
Sunday, CEO Reed Hastings apologized to customers over the recent hike. He admits that he "messed up," and owes "everyone an explanation."
On Netflix's official company blog, here, Hastings wrote that he was afraid that customers wouldn't like the streaming business, since Netflix was founded on mailed DVDs. He alludes to AOL's (NYSE: AOL) dial-up and Borders bookstores as two examples of not becoming great at new things.
Hastings said he slipped into arrogance based on past success, but that he wasn't communicating like he should have, which is where he messed up.
Furthermore, Hastings also said Netflix was going to split off its DVD-rental business into a separate entity entirely. The new business will be named "Qwikster," and the separation will take place over the next several weeks. Hastings commented, "We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming."
Customers will now be able to rent video games -- for Xbox, PlayStation 3, and Wii -- which will be one upgrade option.
No more pricing changes will happen on the split.
Netflix shares closed down 8.3 percent Friday.
Sunday, CEO Reed Hastings apologized to customers over the recent hike. He admits that he "messed up," and owes "everyone an explanation."
On Netflix's official company blog, here, Hastings wrote that he was afraid that customers wouldn't like the streaming business, since Netflix was founded on mailed DVDs. He alludes to AOL's (NYSE: AOL) dial-up and Borders bookstores as two examples of not becoming great at new things.
Hastings said he slipped into arrogance based on past success, but that he wasn't communicating like he should have, which is where he messed up.
Furthermore, Hastings also said Netflix was going to split off its DVD-rental business into a separate entity entirely. The new business will be named "Qwikster," and the separation will take place over the next several weeks. Hastings commented, "We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming."
Customers will now be able to rent video games -- for Xbox, PlayStation 3, and Wii -- which will be one upgrade option.
No more pricing changes will happen on the split.
Netflix shares closed down 8.3 percent Friday.
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