Netflix Retreats From (Terrible) Qwikster Plan

By Alexis C. Madrigal

The ill-fated plan for Netflix to split into two separate websites has been killed.

So now, CEO Reed Hastings announced in a short, simple blog post on Netflix.com that Qwikster is dead just a few weeks after he'd trumpeted its arrival.

"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."

It's a merciful end to an idea that was basically DOA.

If you don't recall (though it wasn't long ago, so you should), on September 18, Netflix announced a plan to split its business in two. Netflix would remain the place for streaming while a new website, Qwikster, would take on the DVD rental business. At the time, CEO Reed Hastings made the case that this was a necessary change because the streaming and DVD businesses were just very different.

The seemingly hasty decision came after the company's share price had fallen from over $300 to $155 at the time of the Qwikster announcement. Hastings seemed eager to stanch the flow of investors from his company. But no one was buying. From September 19 to Friday's stock market close, Netflix's shares were down almost 25 percent.

My favorite evisceration of the plan among the hundreds to choose from came courtesy of Sarah Pavis' at Netflixwatercooler. She entitled her post, "Parallel Universe in Which Netflix Becoming Qwikster Makes Sense." The point is: in our universe, Qwikster never did.

With the announcement, some positive sentiment is finally flowing back to Netflix. Its shares are flying after killing the plan, up almost seven percent this morning. And more importantly (but harder to quantify), the perception among Netflix users that the company had lost track of their desires might begin (begin!) to dissipate.

This article available online at:

http://www.theatlantic.com/technology/archive/2011/10/netflix-retreats-from-terrible-qwikster-plan/246423/