Netflix Will Not Split DVD And Streaming Services

The Cheat Sheet

Netflix no longer plans to split its mail-order DVD service from its Internet streaming and will continue to run both on a single website.

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Last month, Netflix announced plans to split the two services, but customers reacted in anger and the company’s share price continued its decline spurred by price hikes announced in July. Netflix is trading higher today on the news.

“Consumers value the simplicity Netflix has always offered and we respect that,” said co-founder and Chief Executive Officer Reed Hastings today in an e-mailed statement. “There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”

Customers will be able to continue accessing both streaming and mail-order services on Netflix.com, using one account and one password. On September 18, Netflix said that people wanting to use the DVD service would have to sign up for a new service called Qwikster that would require a separate account and billing.

After customers reacted negatively to what amounted to a 60% price hike on Netflix’s DVD service, the company cut its projected subscriber numbers for the third quarter by 1 million. The decision to split the DVD and streaming services came only two days after the company lowered its third-quarter outlook.

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The decision not to split the two services was posted on the company’s corporate blog today and also sent via e-mail to Netflix subscribers.

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