"I messed up" is Netflix CEO Reed Hastings's new mantra. He announced three weeks ago that he'd made a mistake in raising prices and his harebrained solution was to split the company in two: Netflix for streaming video online and something called Qwikster for receiving DVDs through the mail. At the time, everyone said "Huh?" and attempted to justify the inconvenience for customers with business-side speculation. But this morning, they're walking the whole thing back: "We underestimated the appeal of the single web site and a single service," says a Netflix spokesperson, who will never have to tell anyone he works for a company called Qwikster. "We greatly underestimated it." Netflix, with one name and website, will continue to be the place for both DVDs and streaming; Qwikster is dead before it ever existed.
Hastings said in a statement, "Consumers value the simplicity Netflix has always offered and we respect that. There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case." But just after the announcement last month, Hastings foreshadowed the dissent that eventually made him change his mind, writing in a Facebook status update, "In Wyoming with 10 investors at a ranch/retreat. I think I might need a food taster. I can hardly blame them." At this point, he should probably just go into hiding.
"Netflix said in a Sept. 18 blog post that its DVD by mail service would operate at Qwikster.com," the company wrote in an e-mail to subscribers today. "Instead, U.S. members will continue to use one website, one account and one password for their movie and TV watching enjoyment under the Netflix brand." That is, if customers choose to stick around after being taken for this strange ride, which accomplished absolutely nothing.
Actually, that's unfair to say: The Great Qwikster Debacle of 2011 brought us Jason Castillo, the young, pot-smoking Twitter user with the accidentally corporate name, who didn't back down and gained some 10,000 new followers in a few weeks' time. With him, Qwikster will never die.
Netflix Abandons Plan to Rent DVDs on Qwikster [Media Decoder/NYT]