Netflix kills Qwikster before it even gets started

It has been less than a month since Netflix CEO Reed Hastings announced that Netflix would be splitting into two separate companies. The streaming service would retain the name Neflix while the DVD rental business would become Qwikster. It seems that the combination of plummeting stock prices and customer backlash drove Hastings to announce today that he changed his mind and the services would stay together.

The original split of Netflix into Netflix and Qwikster caused a great deal of customer backlash because it would force users to maintain two queues on two websites. This appears to be one of the instances where complaining loudly enough will actually get something done. Hastings responded to the plethora of customer complaints over the split in a blog post. In that post he simply detailed that Qwikster would disappear and DVD rentals would stay at Netflix.com.

“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,” Hastings wrote. “This means no change: one website, one account, one password in other words, no Qwikster.”

The original argument Hastings made for splitting the two services was that they were different businesses that needed to be operated independently. The problem with this independent operation is that it requires even more effort on the part of the consumer to maintain their queues and billing information. A great deal of speculation swirled that the real reason for this split was it would position DVD rentals or streaming to be sold off independently. Other speculation included the idea that perhaps it was easier to get licensing deals for content it the two business were separate.

Hastings did make the point again in this post that he felt the July price change was necessary but the company was done with price changes moving forward. So the short version of all of this is that as consumers we are in exactly the same position as we were a month ago. The price of Netflix is still higher than it was last year but we don’t have to go to more than one website to manage our streaming vs. DVD queues.

What do you think about this flip flop? Does it make sense for Netflix to keep the services under one roof given the obvious frustration of customers? Does it make the idea of splitting the services seem even more half baked in the first place? Let us know in the comments.