Netflix is No Longer Splitting Into Two Companies

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A few weeks ago, Netflix announced they had plans to split the company in two. This would mean that there would be one company (Netflix) to run the streaming service and another new company (Qwikster) that would be handling DVD-by-mail services. Now it appears this isn’t happening.

The announcement of the change caused an outcry from customers as this would mean having two separate websites to keep up with in order to use both services. This coming off the heel of people whining about the price hike. Frankly, I feel the outcry was a bit exaggerated. Yes, nobody likes having to pay more, but was Netflix really doing anything to whine about here? I don’t think so.

Netflix simply started out offering a new service (streaming) for free along with DVD subscriptions in order to gain interest in the new product. Over time, the popularity increased and they could no longer afford to offer it for free. So the result: increased prices and you were now being charged for the streaming service if you kept it. No surprise to me. People had to know this would one day come. Of course, with the false sense of entitlement that runs rampant through this world these days, you would think Netflix just up and started charging an extra $100/month without warning, or that they were now going to ask for your first-born in order to continue subscribing.

Of course, I partially blame the media for this outcry. Controversy sells, so of course media outlets who ran the story were all too happy to put the spin on it making it appear worse than it really was. Wanting to propagate the idea that Netflix were getting out of control, rather than simply reporting the unbiased facts. So, instead, we got headlines like “Netflix Looking to Screw Over Customers With Price Hike?” as opposed to the more logical “Netflix Starts Charging for Streaming Service as Costs Skyrocket Due to the Popularity of the Service”.

That rant aside, it seems now Netflix are listening to customers’ outcries a bit now. In the official Netflix blog, Reed Hastings has come out and stated that the company will no longer be splitting in two. He states that, due to the customer feedback showing that people don’t want to have to deal with two sites, the company is no longer splitting the service up like that. So everything will remain on one site, under one name.

Now, it’s not sure if they’ve cancelled the split completely, or just the “cosmetic” aspect of it. Initially, the split was said to be so that the two services could be run independently, thereby allowing a more focused approach with each service. Honestly, sounds like a good idea to me since they’re two completely different services. I’m hoping they continue with this idea and just create dedicated teams within the one company, thereby keeping the split, but not having to go the inconvenient route of making it two actual companies.

When the split was first announced, Netflix also mentioned that Qwikster would start offering video games as well. Now, since the split is no longer happening, it’s not clear if these plans will continue. Reed Hastings makes no mention of video games at all on the blog. Though, personally I hope they do at least give it a shot.

Source: Netflix Blog

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