Netflix Splits Streaming and DVD Services Into Two Companies. Adding Video Game Rentals. I’m Confused.

Everyone’s still pissed off about Netflix and its pricing changes, to the tune of a million people leaving the service. Today there’s some more glorious over-complication. Netflix is splitting their DVD service and their streaming service into two distinct companies. And if you want to know which one Netflix co-founder Reed Hastings thinks is going to last, you only need to see which service kept the Netflix name.

Techcrunch:

Netflix CEO Reed Hastings just  dropped a bombshell. In the wake of a  rapid decline  in Netflix’s stock price last week, Hastings is taking a bold step by separating the DVD and video streaming services. The DVD-by-mail service will now be called  Qwikster, and the streaming service will maintain the Netflix brand. That’s right: the new business (streaming) will keep the existing name.

Customers can still subscribe to both, but the two sites will not be integrated anymore. Qwikster will also now offer video game rentals through the mail, a long-requested service. With this move, Hastings is reaffirming his long-held belief that streaming is the future of Netflix and the future of entertainment, and Wall Street can judge its progress by how well the streaming business is doing on its own. Separating the businesses will also force customers to make a choice, and it is obvious which choice Hastings wants them to make (hint: it starts with an “N”). Earlier today, I wrote a post beseeching Hastings not to listen to Wall Street after his stock got hammered. You’ve got to give him credit for moving fast in the direction where he thinks the greatest opportunity lies.

He writes in a  blog post  that just went up:

For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something — like AOL dialup or Borders bookstores — do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.

I was fine with my service. I like streaming and I like DVD rentals. What I don’t like is that I’m going to have to maintain two different profiles on two different websites and enter my credit card twice  when I only had to do it once. Pains. In the asses.