Netflix Keeps DVD-by-Mail, Streaming on 1 Website
Netflix said Monday it will keep its DVD-by-mail and Internet streaming services on one website for US subscribers, abandoning plans announced last month to completely separate the services.
But Netflix did not change the new pricing announced for the two services, which upset some subscribers and reportedly led to numerous cancellations.
"U.S. members will continue to use one website, one account and one password for their movie and TV watching enjoyment," the company said in a statement.
Netflix acknowledged it had made a mistake in announcing on September 18 that it would break up its two services by putting its DVD-by-mail business on Qwikster.com.
"Consumers value the simplicity Netflix has always offered and we respect that," Reed Hastings, Netflix co-founder and chief executive, said in the statement.
"There is a difference between moving quickly -- which Netflix has done very well for years -- and moving too fast, which is what we did in this case."
The reversal followed a consumer backlash at the idea of using a separate website to rent DVDs and a hike in prices, and marked the second time in as many months that the Netflix CEO has apologized to subscribers.
Netflix announced in July that combined online streaming and DVD-by-mail services that previously cost $10 per month was jumping to $16 monthly. Subscribers can also opt to sign on for one service or the other for $8 a month.
Hastings apologized in September for the handling of a price hike, but made no change to the pricing scheme.
"I messed up. I owe everyone an explanation," Hastings said in a letter to subscribers posted on the Netflix blog late Sunday.
"It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes," he said. "That was certainly not our intent, and I offer my sincere apology."
Netflix shares leaped 7.5 percent higher to $125.99 in early trade in New York.
