Netflix Spins DVD Service Into Separate Business
STEVE INSKEEP, host: NPR's business news starts with a new name for part of Netflix.
(SOUNDBITE OF MUSIC)
INSKEEP: Netflix CEO Reed Hastings sent an email to his customers early this morning, saying quote: I messed up. Subscribers have been furious about recent price hikes for the company's DVD by mail and Internet-streaming services. The company says a million people canceled their accounts after the prices went up - 1 million people. And since then, Netflix's stock has gone down. It's plunged almost 20 percent.
DAVID GREENE, host: Now, today's email wasn't just an apology. It was also an announcement that Netflix is splitting into two businesses, itself is an admission that Netflix just could not integrate its DVD service and its streaming service.
INSKEEP: The DVD business will now be called Qwikster. That's Q-W-I-K-S-T-E-R - rhymes with hipster. Qwikster will offer the DVDs and video games. The streaming service, meanwhile, will still be called Netflix. Ironically, though, since this all started with a complaint about price hikes, the email from the CEO and a blog post say there will be no changes to the current pricing.