In a blog posted Monday morning, Netflix CEO Reed Hastings said that Netflix would pull the plug on Qwikster, citing the confusion that would arise from having a separate, DVD-only offering. Qwikster and Netflix would have operated on two separate websites without integration between the two, requiring users to pay two different companies each month, maintain two separate profiles, and post any movie reviews twice.
"It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs," Hastings wrote. "This means no change: one website, one account, one password… in other words, no Qwikster."
Qwikster was unpopular from the get-go among users.
"Splitting Netflix in two so that you have Netflix and Qwikster is the worst business decision since New Coke," wrote a disgruntled customer, one of over 27,000 who commented on Hastings' blog post.
The decision to launch Qwikster as a separate DVD-only business followed Netflix's controversial price hike that did away with its $9.99 per month subscription plan offering unlimited streaming and DVD-rentals, and replaced it with two separate $7.99 per month plans offering unlimited streaming or the ability to rent one DVD at a time. In other words, what previously cost users $9.99 per month would cost them $15.98.
When Hastings first unveiled Qwikster, he explained that the unique challenges required to market and provide DVD rentals made it necessary to operate this service as its own business:
[W]e 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. It’s hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best: In a few weeks, we will rename our DVD by mail service to “Qwikster”.
Reaction to the news it was curtains for Qwikster was mostly negative, with many commenters suggesting it was time for Hastings to step aside as CEO.
"Wow.... time for a new CEO with all this flip flopping," wrote one user. Another chimed in, "Reed you don't know what you're doing, do you? Please offer me a job, I've got a few easy steps to save the company."
One user pointed out that Qwikster had promised to offer video games to its users, yet Hastings made no mention of what would happen to these rentals and whether games would be available for rent via Netflix.
Do you think Netflix made the right move? Will you miss Qwikster? What will the fallout mean for Netflix?