Netflix Separates DVD Business From Movie Streaming
October 6th, 2011 • Uncategorized
Netflix has decided to separate its DVD Business (and called it Qwikster) from their Movie Streaming(remains Netflix). They are now two different companies with different websites. Reed Hasting, Netflix’s CEO claims that its an opportunity for the company to grow and expand. However, customers are not happy and Hasting has received many angry letters for which he had to do a public apology. Nevertheless he claims that “the separation was necessary because the businesses has different growth trajectories”. Is he correct? Will this be a positive decision for Netflix?
Personally, I believe that the idea Hasting had sounds excellent in paper but when it transfers to reality, it won’t have the same welcome he hoped for. For one, the prices are too high already and making these separation will make the customers completely switch to another company that is cheaper and is not that complicated (ex. Netflix before the change). If customers are not happy at the moment and the shares are going down then it is not a good time to make a huge decision like this one; unless Netflix is ready to loose most part of their clientele and future profit.
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