Business, Finance & Economics

Netflix cancels plans for DVD only service Qwikster

Netflix has announced that it has cancelled plans to open a separate DVD business named Qwikster. Qwikster was unveiled in September because Netflix officials believed that streaming video and DVDs had become two different businesses, reports USA Today.

Netflix CEO Reed Hastings explained his decision to split the businesses by stating that DVD and streaming had "very different cost structures" and "different benefits that need to be marketed different, and we need to let each grow and operate independently."

Customers hated the idea of two separate businesses, reports Fox News.

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"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," says a statement from CEO Reed Hastings in a post on the official Netflix blog.

Wall Street didn't like the idea either. After Netflix announced Qwikster, the company's stock fell 25 percent — From $155 on Sept. 16 to $117 on Oct. 7. Netflix's stocks had been tumbling since July.

According to Fox News the announcement to kill Qwikster will only do so much to appease investors and customers.

Netflix still has not changed the pricing plans it announced this summer, which amount to a 60 percent price hike for about half of its customer base. That price hike was what kicked off the company's tumble from a peak of $300 a share.

While most of the reaction to announcement is positive, moves by Netflix have seemed "too erratic" reports CNET. They explain that while stocks were up 7 percent in morning trading, "there is still a lot of criticism of the company."