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Netflix to split into two companies



DVD/Games by mail to be Qwikster
It looks as if Netflix had much more up its sleeve when it announced its price increases, causing consumer rebellion. Now, CEO Reed Hastings of Netflix has announced that the company will be splitting into two separate companies.

Netflix will continue to focus on offering on demand streaming. A new separate spin-off company that will be called Qwikster will be handling all of the disc rentals. Yes, that is right: we said disc rentals, as the new Qwikster will continue to offer DVDs (of course) and in addition, the company will be adding an upgrade option that it already has for Blu-ray; this will allow subscribers to rent video games as an upgraded offering for an additional fee per month. This means that Qwikster will be going head to head with Gamefly for video game rentals.

It is unclear how things will play out on pricing, but it is suspected that at least to start the pricing will be pretty much what we have seen already announced. It is currently unknown how much additional video game rentals will cost per month. Since the companies are separate there will be no plan that offers both disc rentals and streaming.

The Qwikster web site will be a re-branded version of the current Netflix web site. We will get more details in a few weeks when Qwikster officially launches.
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