Netflix Makes More Changes, Splits Company into Two Divisions

If you’re one of the 3 millions people who had a subscription to Netflix about two months ago, you know that they implemented a price hike for their DVD and online streaming services (going from one flat fee of $7.99 a month to two fees that double that).  Both customer numbers and the stock price plummeted.

Yesterday Netflix founder and CEO Reed Hastings wrote a blog post, publicly apologizing for the change, and at the same time, announced even more changes to Netflix, including a complete split into two businesses!

While Reed admitted they “messed up” with one mistake, he confirmed that Netflix will now be focusing specifically on online streaming of digital content, while the DVD-by-mail service will be run by a brand new company called ‘Qwikster.’

To clarify, while Netflix will be online content (like a hulu, etc), Qwikster will basically be the original Netflix along with a choice of video games. That means two separate websites, accounts, credit card charges, etc.

Check out Reed’s full blog entry right here, and let us know what you think of the whole mess.  Should Netflix have just shelled out the money to Starz, and stayed as is?  Or will this all make sense in a few months? 

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