The Netflix split. Why, Netflix? Why?

Netflix made a lot of people angry this summer when the company announced a price hike for its DVD-by-mail and video streaming services. The price change split the DVD-by-mail and streaming services into two separate options, when previously they were bundled.

Price hikes are never popular, but the complaining and media coverage of said complaining may have gone too far.

The split between the DVD-by-mail and streaming services became more pronounced today, when Netflix CEO Reed Hastings announced in a letter to subscribers (who include this blogger) that Netflix will continue to stream video, but its DVD-by-mail option will be carried out under the guise of a new company called Qwikster.

The switch, to happen in a matter of weeks, will mean that customers who have streaming and mail services will have to manage two separate accounts. Qwikster customers will also be able to rent video games by mail if they pay an additional premium, but Hastings tells customers there will be no further price changes.

Got that? No? Maybe? Is Netflix crazy like a fox?

My initial reaction is that Netflix’s impending split makes no sense at all, but maybe the company’s executives know more than I do. Nonetheless, Qwikster strikes me as a terrible name. The name “Netflix” tells me that I can watch movies, or, “flicks” on the Internet. The word “Qwikster” tells me something is quick, but I have no idea what.

Netflix announced lowered subscriber estimates but the company also reported that executives stuck  by their new pricing plan. But splitting the service makes it easier for customers to leave at least half of their plan, and the competition seems to be tougher in the streaming services that Netflix pioneered.

If I want to watch a movie that Netflix doesn’t stream, it’s easy under the company’s current structure to request the DVD and have it in a couple of days. If another company has a better streaming option, which Hulu Plus may have with its addition of the Criterion Collection, I may end up choosing to leave Netflix and maybe keep Qwikster. Or maybe I just support my local video store, depending on which is a better value for my dollar.

Reactions from around the web after the jump:
Continue reading