By Quentin Fottrell
Qwikster is dead. Long live Netflix.
Netflix executives conceded this morning they should never have gone fast-forward with plans to separate its DVD-by-mail and video-streaming businesses, according to a story in The Wall Street Journal. That’s good news for customers who were deeply unhappy about the inconvenience of having to access two websites for those services. But it doesn’t change the fact that customers who use both services still have to pay 60% more.
Here’s what was not spelled out by CEO Reed Hastings in the companys’ official blog on Monday: Netflix’s recent price increases will remain in place. It costs $15.98 for both DVD rentals and video-streaming, or $7.99 each. No changes there, then. Netflix spokesman Steve Swasey says the price increases impacts half of the company’s 24 million subscribers.
He says those who rent DVDs only actually save money as it originally cost $18.99 for the original all-in-one service. But there’s a warning here for customers too. If you just rent DVDs or only use video-streaming intermittently, check your plan to make sure you’re paying $7.99 and not being charged for both services — and ask yourself if your occasional video-streaming is worth it.
But that also raises another question about the 1 million subscribers that analysts say have left in recent months. According to the company’s second quarter report, it had 25 million customers. So, if Swasey’s estimate is accurate, they have lost 1 million customers since the price increases began. Customers were upset about the inconvenience of Qwikster, but they were more angry about the price hike.
In the company’s official blog on Monday, Hastings announced the change of heart. “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,” he wrote. “This means no change: one website, one account, one password. In other words, no Qwikster.”
It’s the second time in weeks Hastings turned apologetic after his customers went apoplectic.
However, the tone of this latest announcement is vastly different to the mea culpa he delivered last month for hiking prices by as much as 60%: “It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes. That was certainly not our intent, and I offer my sincere apology.”
Read more on the reversal at WSJ.com.
(This story was updated at 11.20am EST to include more details on prices.)