In July, when Netflix announced that it would split up its digital streaming and direct mail DVD services into two companies and charge $8 a month for each one (for a total of $16 a month, up from $10), customers were outraged and the company's stock dropped. If you were among those who canceled your subscription in protest, it just might have worked. The New York Times reports that Netflix announced today that the heavilly criticized plan is off:
Abandoning a break-up plan it announced last month, Netflix said Monday morning that it had decided to keep its DVD-by-mail and online streaming services together under one name and one Web site.
The company admitted that it had moved too fast when it tried to spin-off the old-fashioned DVD service into a new company called Qwikster.
"We underestimated the appeal of the single Web site and a single service," Steve Swasey, a Netflix spokesman, said in a telephone interview. He quickly added: "We greatly underestimated it."
Mr. Swasey said that the Netflix chief executive Reed Hastings declined an interview request. But in a statement, Mr. Hastings said, "Consumers value the simplicity Netflix has always offered and we respect that. 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."
… "The key remaining question," [Ingrid Chung of Goldman Sachs] said, "is why did they make the Qwikster decision in the first place?”
Next up, Bank of America debit card fees?
Read more at the New York Times.
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