Netflix will soon call its DVD mailing service Qwikster and will branch out to video game rentals. The revelation comes from Reed Hastings, the service’s decidedly more contrite co-founder and CEO, who sent out an e-mail to subscribers entitled “An Explanation and Some Reflections.”
Hastings started out the lengthy e-mail by admitting Netflix fumbled its previous announcement that it would break apart DVD shipping and streaming. “… many members felt we lacked respect and humility,” said Hastings. “That was certainly not our intent, and I offer my sincere apology.”
Hastings revealed that Netflix will rebrand its DVD subscription service “Qwikster.com,” and will branch out to offer users the ability to rent video games for Wii, PlayStation 3 and Xbox 360 consoles – a shot across the bow of Gamefly, which offers a Netflix-style rental service by mail, and Redbox, the video rental kiosk system which has also begun to offer video games.
Netflix.com and Qwikster.com will not have integrated Web sites, Hastings said. Users who continue to subscribe to both the DVD mailing and streaming services will need to manage their rental queues on the two separate services, and will see two separate bills on their credit card – though the cumulative price will remain the same as what Netflix has previously described.
Hastings’ note comes a few days after Netflix lowered its forecasted subscriber base by one million, from 25 to 24 million subscribers. The company’s stock valuation has taken a beating, down 40 percent since it announced plans to restructure its subscription prices over the summer. The company’s loss of content partner Starz hasn’t helped the stock’s downward slide, either.
Hastings defends the price increase, calling streaming and DVD “two different businesses, with very different cost structures.”
“I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly,” Hastings said.