Netflix separates DVD-by-mail service into "Qwikster"

Netflix has just announced via their company blog (in the midst of a lengthy apology) that they will be renaming and splitting their DVD-by-mail service into a new entity called “Qwikster.” Netflix CEO Reed Hastings says that the move was prompted due to the two services (streaming and DVD-by-mail) slowly becoming two different businesses with different models and cost structures, and that the move is “necessary and best.” The name Qwikster refers to quick delivery; the Netflix name will be kept for streaming.

One benefit of the split is that the dedicated Qwikster team will also be able to deliver video games for the Wii, Xbox 360 and PS3 to your doorstep as an upgrade in the same way the Blu-ray upgrade option functions. “Other improvements will follow.” However if you’re a current subscriber to both the DVD-by-mail and streaming services there will be some changes and obvious splits that will occur.

First is that queues for both services will be completely separate, along with ratings, reviews and even billing. DVD-by-mail users will use, streaming will use and those that use both will have to use both despite the separation between them. Hastings says that the separate websites for both services is an “advantage” and is “simplicity for members”. The pricing to use either or both services will remain the same as they are currently.

Some members will likely feel that we shouldn’t split the businesses, and that we shouldn’t rename our DVD by mail service. Our view is with this split of the businesses, we will be better at streaming, and we will be better at DVD by mail. It is possible we are moving too fast – it is hard to say. But going forward, Qwikster will continue to run the best DVD by mail service ever, throughout the United States. Netflix will offer the best streaming service for TV shows and movies, hopefully on a global basis.

Hastings also acknowledges all the members who remain loyal to Netflix despite all the shifting around, and wishes to communicate more about reasons behind change in the future as both the new Qwikster and Netflix teams “work hard to regain your trust.” Andy Rendich, who is the new CEO of Qwikster, has made a welcome video (below) to mark the occasion.

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