Netflix has backtracked on the controversial decision to spin-off the DVD business

Oct 10, 2011 12:50 GMT  ·  By

Just like that, Qwikster, the much-unloved Netflix spin-off, is gone without really "being" here in the first place. Three weeks ago, Netflix announced plans to split the company with the DVD-rental business becoming Qwikster, a fully-owned, but separate company.

The idea was that the split, which involved people getting two subscriptions if they wanted both Netflix and Qwikster, would be healthy in the long run and that it would enable Netflix to stay nimble and focus on getting more digital content for its catalog.

But subscribers and investors alike hated the move, so much so that Netflix is completely backtracking on it, there will be no Qwikster, DVDs are staying at Netflix and that's final. For now.

"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," Netflix CEO Reed Hastings wrote on the company's blog.

"This means no change: one website, one account, one password… in other words, no Qwikster," he said.

There's no ambiguity in the announcement, everything related to Qwikster is dead, the company will continue to offer online streaming and DVD-rentals at the same time and at the same place to subscribers.

However, there will be no turn around on what was an even more controversial decision, the price hike announced last summer which came in effect recently. Netflix, blaming it on rising digital content acquisition costs, albeit subtly, is now charging $7.99, 5.98€ for each, up from $9.99, 7.46€ for the bundle.

In fact, Hastings is defending the move in the latest blog post as well. "While the July price change was necessary, we are now done with price changes," he says.

The decision to backtrack on Qwikster will probably go well with subscribers and investors alike, but don't think that the idea is gone forever. Sooner or later, Netflix will have to distance itself from the DVD business more than it already has.