Netflix Drowns Qwikster in the Stream

Los Gatos-based company announces it will stay one company, keep its name

By Sajid Farooq
|  Thursday, Oct 13, 2011  |  Updated 11:35 AM EDT
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Netflix Drowns Qwikster in the Stream

Netflix is trying to get its house back in order by announcing it will not spin off into two companies after all.

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Netflix is hitting rewind on an idea to split the company in two.

Monday the California-based movie rental company continued a string of recent strange moves by announcing it would no longer split itself into two entities: Netflix and Qwikster.

The move was initially announced last month in response to customer anger over a plan to raise monthly rates to $16 for subscribers who wanted to be able to both stream and rent physical DVDs.

Netflix CEO Reed Hastings introduced the idea of splitting his company in two, with Netflix being a streaming only company and Qwikster becoming the mail order DVD business.

But a stream of bad press -- including a "Saturday Night Live" spoof -- and continued customer backlash has forced Netflix to change its mind again.

"We underestimated the appeal of the single web site and a single service," Steve Swasey, a Netflix spokesman, told The New York Times. "We greatly underestimated it."

Netflix's quick about face comes as the company says it will try to slow down its moves and decision-making.

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