This article was last updated on April 16, 2022
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Recently Netflix announced that it will be charging separately for its DVD services and Internet browsing. The restructuring raised serious opposition from the customer base, reducing it by approximately one million. The shift also caused investors to raise questions ultimately causing Netflix to lose major shares in the stock market. However, as it appears that this restructuring was just a part of Netflix continuation of restructuring their services.
“In hindsight, I slid into arrogance based upon past success,” the CEO Reed Hasting said. “But now I see that given the huge changes we have been recently making, I should have personally given a full justification to our members of why we are separating DVD and streaming, and charging for both. It wouldn’t have changed the price increase, but it would have been the right thing to do.”
According to a recent development, Netflix customers have been informed through a blog post of the CEO, Reed Hastings who announced the formation of Qwikster – a new brand under which the DVD rental service of the company will operate. This has been done in order to facilitate the company to focus on the streaming services they offer. Hastings highlighted that managing both the DVD rental and Internet streaming was paving way for a much more complex business model as both require different approaches.
In the words of the CEO “We feel we need to focus on rapid improvement as streaming technology and the market evolve, without having to maintain compatibility with our DVD by mail service,” he wrote. “So we realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently.”
Thus, by moving DVD rental under a new banner – Qwikster, the company aims to focus up on their Internet streaming services and enhance their streaming. Andy Rendich, who has led the DVD operation for four years, will be Qwikster’s CEO.
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