Netflix Splits Services

Netflix announced last week that it was splitting into two services; Netflix will continue to be the name of the popular online streaming video service. The legacy business, mail-order DVD rentals, will now be called Qwikster. This move comes on the heels of intense criticism of Netflix’ decision to raise the price of the combined service.

So, is this move a stroke of genius, or a disaster? Opinions are mixed about where the two companies are going. Netflix admitted that it had lost several hundred thousand subscribers since the price hike was announced. For those that planned on continuing with both services, how will they react to having two services and two monthly bills? Does this make it easier for customers to justify both, or does it make it easier for customers to cancel the service that they use the least? Many observers are betting on the latter.

Netflix is scrambling to cut new deals with producers to show more value for their customers. In the last week they announced new deals to add more from Discovery, TLC and Animal Planet. To turn around the bad publicity, they had better have more deals ready to announce soon.