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Netflix Splitting Business, Adding Game Rentals

by Jeff Cork on Sep 19, 2011 at 03:30 AM

Netflix has been under fire recently after the video-distribution company raised its prices and content-provider Starz ended their partnership. Netflix thinks its found a solution by splitting its physical rental and online streaming businesses and adding a long-requested feature: game rentals.

Co-founder and CEO Reed Hastings explained the move on the Netflix blog. According to Reed, the company's DVD by mail and online streaming businesses are growing more and more apart as online streaming matures. That's why the physical component of the business is now being rebranded Qwikster. The iconic red envelopes will remain the same (though they'll have a new logo), as will the current pricing structure. In addition, subscribers will be able to rent Wii, PS3, and Xbox 360 games at no extra cost. Netflix and Qwikster will have separate websites, and users will manage streaming and DVD by mail queues independently. While that sounds like a bit of a hassle, Hastings says that customers are basically already doing that under the current system.

These changes will be happening "soon," according to Hastings.

Check out the entire post on Netflix's blog. It's essential reading if you enjoy watching CEOs grovel.


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