Netflix Split: Qwikster and Netflix

Publication: The New York Times

Title: Netflix to Break Business in Two

Article by: Elizabeth A. Harris


Late Sunday night, the CEO of Netflix Reed Hastings posted an apology letter to customers on the company website, stating he was sorry for the way he managed and communicated pricing and subscription changes.

He revealed that the company would be divided into two.  The DVD-by-mail portion of the business is now called Qwikster.  The movie streaming service would be called Netflix.  In addition, the two entities would appear separately on customers’ bills.

After the changes in Netflix pricing and subscription services this summer, 1 million out of 25 million customers left.

The New York Times notes:

“But Mr. Hastings did not apologize for increasing subscription fees, or for asking customers to think about the two services separately. Instead, he blamed his own “arrogance based upon past success” for a failure to communicate in the face of a fast-changing business model.”


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