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US movie rental giant Netflix has separated its DVD mail-out service from its movie streaming one, rebranding the former to Qwikster.

The move was triggered by fierce protest from Netflix subscribers over a recent price hike, which in turn caused the company’s stock prices to plummet.

The company initially revealed its intentions to separate the two services and their respective pricing structures earlier this summer. However, it failed to communicate the changes clearly to subscribers.

Users must now subscribe separately to each service, and the websites will be entirely separate. Therefore, subscribers will need to have an account for both Netflix and Qwikster if they want access to both services. The movie streaming service will retain the brand name Netflix.

In a blog post on Sunday, Netflix CEO Reed Hastings said the company has made the changes to future-proof its business. “We realised that streaming and DVD by mail are becoming two quite different businesses with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently,” he said.

However, he acknowledged the company had not been explicit enough with its subscribers about the changes to the pricing structure, adding that he had “messed up”.

The changes will see Hastings remain as CEO of Netflix, with chief service and operations officer Andy Rendich stepping up as CEO of Qwikster.

“It is possible we are moving too fast – it is hard to say,” said Hastings. “Netflix will offer the best streaming service for TV shows and movies, hopefully on a global basis. The additional streaming content we have coming in the next few months is substantial, and we are always working to improve our service further.”

Netflix is due to roll out in Europe in the next year, with the UK anticipated as one of the first countries in which it will launch.

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Published 19 September, 2011 by NMA Staff

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