Netflix now admits to messing up. But it won't change its pricing plan -- just a product name.
Its big DVD-by-mail service, which streams TV series and films, will now be called Qwikster -- and compete with its own management. Netflix veteran Andy Rendich will be the CEO of Qwikster. The name "Netflix" will be just for streaming video service.
In July, Netflix said the DVD-by-mail service, which included a smaller streaming video business, will be split into two -- and raise its collective monthly price from $10 to $16. Soaring programming and other costs have been cited as the reason.
Last week, Netflix CEO Reed Hastings said its projections for growth will be much lower -- effectively losing 600,000 customers and a projection of 1 million less than anticipated. This caused its stock price to crumble by 20%.
In a follow-up communication, a Sunday night blog, Hastings said: "We realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently."
Hastings takes further blame: "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 .... When Netflix is evolving rapidly, however, I need to be extra-communicative. This is the key thing I got wrong. In hindsight, I slid into arrogance based upon past success," he added.
When it comes to its streaming service, Hastings says that additional and substantial streaming content will be available in the next few months.