Netflix Backpedals, Nixes ‘Qwikster’ for DVDs

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Qwikster’s dead before Netflix could even give it a chance to live.

In response to customer complaints, Netflix announced that it will not spin off mail-order DVD rentals into a separate company called Qwikster, as announced in September. Netflix’s website will continue to handle streaming videos and DVD rentals.

“This means no change: one website, one account, one password … in other words, no Qwikster,” CEO Reed Hastings wrote on the company’s blog.

(MORE: Netflix Backlash Rages On in Response to ‘Qwikster’)

Netflix wanted to rid itself of DVD rentals so its streaming service could grow independently. DVD rentals have a different cost structure and different marketing needs, Hastings explained less than a month ago. In other words, they’re a burden that will ultimately become unnecessary as people stop using physical media.

But customers were outraged. They liked the idea of being able to put a DVD in their queue when a movie wasn’t available for streaming, and they wanted to have all their reviews and recommendations in one place. Qwikster was an unnecessary complication. And the name was kind of silly. It didn’t help that Netflix had just raised prices by 60 percent for users who wanted DVDs and streaming.

Those price changes will remain in place, Hastings said, adding that “we are now done with price changes.” He emphasized that Netflix has been adding more streaming content lately, including hundreds of movies and more than 3,500 TV shows. (Netflix will be losing a bunch of content in February, when Starz takes its business elsewhere.)

One loose end from this branding debacle: When Netflix announced Qwikster, it said video games would be added to the rental service. The New York Times, quoting a Netflix spokesman, reports that the decision to add video games is “to be determined.”

Netflix’s volte-face may have something to do with the sudden loss of subscribers and plummeting stock price. But I think the tipping point was this unaired Saturday Night Live skit that lampooned the company’s drastic changes:

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(MORE: Mad About Netflix Prices? Here Are Some Alternative Services)