Netflix stock is up today, on news that America's favorite source for video rentals has reversed course on an unpopular marketing move announced less than a month ago. But the headlines notwithstanding, Netflix hasn't really "killed" its "plan to split off DVD rentals." Just the way you order them.
CEO Reed Hasting announced via a blog that Netflix won't be spinning off its DVD-by-mail rental operation into a new company called Qwikster, with its own website and ordering procedure.
That means the same Netflix website and sign-in procedure used to order instantly streaming movies on your computer will still be the place to also visit for mail order movie rentals. This is a good thing, as Netflix' library of hard disc movies is still way deeper (and more current) than the instant streaming options. So users of both services will find what they want/need without having to look here AND there.
But - and this is a BIG but - Hastings said nothing about altering the newly adopted, more expensive payment arrangements. If you do opt for a combo deal of streaming movies and mail order delivery, it will still cost a minimum of $15.99 a month (with one disc out at a time). That's up significantly from the $9.99 combo package Netflix used to offer and the primary reason, I'm sure, why the company has lost more than a million subscribers in recent weeks. (Oh and if you want videogame rentals - a new Netflix thing- it'll cost even more, unlike the new $10 deal from Blockbuster and DISH network. )
Adding to Netflix'recent surge of bad karma - the Starz pay channel service isn't renewing its pact with the streaming side of the operation, which has brought more recent movies (especially from Disney and Sony Studios) to Netflix subscribers' instant view que.
Netflix has touted new partnerships with Discovery and AMC. But "Mad Men" notwithstanding, the box office appeal of those content sources just ain't the same as Hollywood's finest.
It's been speculated that Netflix had two intentions in spinning off Qwikster. First was to separate the old school, snail mail operation from its thoroughly modern, streaming-from-the-cloud service that really gave the company its name. And second, so Qwikster could then be sold off to some loser, er, "counter-intuitive" investor. Looks like that strategy's off the table, for now.