In
a blog post published this morning, Netflix CEO/co-founder Reed Hastings revealed that the company will no longer separate its physical rental selection from its streaming media.
Last month, Hastings said that all physical rental activity would operate through a website called Qwikster that would not share any cross-platform functionality with Netflix; subscribers would visit Netflix to manage their streaming video queue and then go to Qwikster for their Blu-ray/DVD/video game queue.
However, this news inspired fierce public scrutiny - many people viewed Qwikster as Netflix's preemptive strategy towards ultimately dropping physical rentals altogether in order to focus on streaming services. After losing nearly one million subscribers and seeing Netflix's September stock prices drop almost 65% from their July 2011 high of $304.79, Hastings has abandoned the Qwikster idea. As he wrote in today's blog:
"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. This means no change: one website, one account, one password… in other words, no Qwikster."
In addition, the CEO promised that "while the July price change was necessary, [Netflix is] now done with price changes." Since this morning's announcement, Netflix's stock has risen 7%.
Hastings' decision has yielded mixed results from investment analysts. While Lazard Capital Markets analyst Barton Crockett told
The Hollywood Reporter this morning that he believed the Qwikster removal represented "a good choice by Netflix," Janney Montgomery Scott analyst Tony Wible was not so optimistic, branding the change a "desperate" move "to accelerate the positives...and rebuild optimism."
Wible went on to say that though he felt consumers would appreciate not having to negotiate with a separate website, he was uncertain if "the harm [Netflix] caused can be reversed."
Hastings has yet to comment on whether or not Netflix will go ahead with video game rentals. Many subscribers thought that perk Qwikster's lone benefit, but Hastings pointedly avoided mentioning game rentals in the new blog post, noting that he is "committed to making Netflix the best place to get movies & TV shows."
In a New York Times interview, Steve Swasey, a Netflix spokesman, further fueled speculation, saying that a Netflix video game plan is "to be determined."