Netflix got hammered by customers in September when it announced it would split into two companies, one called Netflix to offer streaming TV and movies, and a new one called Qwikster, which would handle the company's mail-order DVD rental business.
Now they're abandoning the plan, The New York Times reports.
“We underestimated the appeal of the single web site and a single service,” Steve Swasey, a Netflix spokesman, said in a telephone interview. He quickly added: “We greatly underestimated it.”
The break-up and reversal all stems from the company's unpopular attempt to raise rates on customers who subscribe to have DVDs mailed to them. That service is expensive for Netflix to maintain, and company officials thought they could structure a payment system, and a corporate structure, that would get them past an outmoded business model, The Times' Brian Stelter reports.
Its forward momentum is mainly in the direction of streaming:
Netflix, meanwhile, still has to concentrate on its online streaming service, which is widely considered to be its core business.
Next February, it is expected to lose the right to stream films from Walt Disney Studios and Sony Pictures Entertainment as a result of a failed renegotiation with the premium cable channel Starz. But it announced a deal last month with DreamWorks Animation to stream that studio’s films starting in 2013. Last week, it announced a deal with AMC Networks to stream old episodes of TV shows like “The Walking Dead.”
It's also in the running to broadcast new episodes of “Arrested Development” and “Reno 911.”
This article is from the archive of our partner The Wire.