Netflix has responded to the numerous complaints from subscribers and, of course, the plunge in its stock prices. The web-based rental and video stream company has decided to cut the two services into separate divisions in the coming weeks.
Reed Hastings, CEO and co-founder, openly acknowledge the crushing negative feedback, saying, “I messed up. I owe everyone an explanation.”
Variety reports that the company hopes the new division, called Qwikster, will help stabilize its subscriber base and restore its stock prices. Another smart move by the company is adding videogames to its rental options, which should make subscribers happy.
Hastings says “members have been asking for videogames for many years, and now that DVD by mail has its own team, we are finally getting it done.”
Variety mentions that the decision to split the company came after developing a solution to the problem that the two divisions had different cost structures and marketing needs. There was also incentive to improve the streaming service because that is what Netflix is betting on in the future. It can’t go without mentioning another factor, and that is facing increased competition from Walmart and Amazon, with other companies in the horizon.
Enter Qwikster, which will soon launch, according to its website. Customers will soon go to that website to add DVDs to their queue as well as videogames. The company plans to offer titles for the Xbox 360, PlayStation 3 and Wii.
I am sure there will be other things to iron out with Netflix, Qwikster and the subscribers, but in the long haul, when we look back, it will only be a brief moment in the evolution of social media.