Make us your home page
Instagram

Netflix abandons plans to split its DVD, streaming services

NEW YORK — Netflix generates more head-scratching plot twists than a cheap B-movie.

On Monday, the company said it would reverse a previously announced decision to put its DVD-by-mail and Internet streaming services on separate websites, a plan that was widely derided by Net­flix subscribers.

People will be able to use both services under one account and one password, CEO Reed Hastings said Monday in a blog post.

Netflix Inc., however, plans to stick to pricing plans introduced in June, which means subscribers are now paying separately for streaming service and mailed DVDs. That change amounted to a price increase for most subscribers.

Investors approved of the reversal, sending the stock up $7.68, or 6.6 percent, to $124.89 in midmorning trading after rising as high as $128.50.

But even with Monday's premarket bounce, Netflix's shares have been savaged by the price change and the Qwikster initiative. They've lost more than half their value since July.

Netflix had 24.6 million subscribers at the end of June, but it warned last month that it expected a net 600,000 to leave by the end of September because of the price increase. That would be by far the worst downturn in the company's history. Netflix reports final figures on Oct. 24 for the quarter that ended in September.

Here are some questions and answers for Netflix customers:

Will I have to go to two websites to manage my DVD queue and watch streaming videos?

No. Netflix backed off its plan Monday to create two separate sites — one at Netflix.com for streaming videos, and another at Qwikster.com, for DVDs.

Will I still have to pay for the services separately?

You'll have one account for both services. But the price changes Netflix instituted in July, under which it charges separately for streaming and for DVDs, are still in place. In other words, streaming is no longer a freebie thrown in with the DVD subscription.

Why did Netflix change its mind?

Customers had greeted the idea with jeers and threats to take their business elsewhere. In a blog post, CEO Reed Hastings said he's realized the change would make things too complicated for subscribers.

What plans does Netflix offer now — and how much do they charge for each?

The video streaming service costs $8 per month. The DVD service starts at $5 if you want one DVD out at a time and a maximum of two mailings per month, and goes up to $44 for those who want to have eight DVDs out at a time and unlimited mailings.

Why did Netflix think splitting the site in two was a good idea to begin with?

The company sees the streaming service as its future, and what it wants to focus on. The DVD-by-mail service got Netflix into homes, but it's expensive to mail DVDs and the potential for growth is limited. In homes, the streaming service is making the jump from PCs to the living-room TV, thanks to game consoles, DVD players and TVs that come with the ability to connect to the Internet. It's also going outside the home, since Netflix is now available on smart phones and tablets.

Netflix abandons plans to split its DVD, streaming services 10/10/11 [Last modified: Monday, October 10, 2011 10:07pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Rick Scott appoints 'my friend,' Jimmy Patronis, as Florida CFO

    State Roundup
    Rick Scott appoints Jimmy Patronis (background) as CFO. [STEVE BOUSQUET | Tampa Bay Times]
  2. Local gas prices plummet as Fourth of July holiday travel approaches

    Tourism

    TAMPA — Local gas prices are enjoying an unseasonal dip around the $2 mark just in time for the hectic Fourth of July holiday travel weekend.

    The price of regular unleaded gasoline has dropped to $1.99 at a Rally station on Pasadena Ave. South and Gulfport Boulevard South, South Pasadena.
[SCOTT KEELER   |   Times]

  3. Air bag recalls, lawsuits lead Takata to file for bankruptcy

    Autos

    Shattered by recall costs and lawsuits, Japanese air bag maker Takata Corp. filed Monday for bankruptcy protection in Tokyo and the U.S., saying it was the only way it could keep on supplying replacements for faulty air bag inflators linked to the deaths of at least 16 people.

    Japanese air bag maker Takata Corp. CEO Shigehisa Takada bows during a press conference in Tokyo on Monday. Takata has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of defective air bag inflators.
[(AP Photo/Shizuo Kambayashi]
  4. Airbag maker Takata bankruptcy filing expected in Japan, U.S.

    Corporate

    DETROIT — Japanese airbag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators.

  5. Federal agencies demand records from SeaWorld theme park

    Tourism

    ORLANDO — Two federal agencies are reportedly demanding financial records from SeaWorld.

    Killer whales Ikaika and Corky participate in behaviors commonly done in the wild during SeaWorld's Killer Whale educational presentation in this photo from Jan. 9. SeaWorld has been subpoenaed by two federal agencies for comments that executives and the company made in August 2014 about the impact from the "Blackfish" documentary. 
[Nelvin C. Cepeda/San Diego Union-Tribune/TNS]