Netflix splits DVD and streaming services

Video rental company Netflix Inc split its DVD service to a separate website called Qwikster, setting off another round of complaints from customers already angry at a price increase and sending its shares down seven per ent.

Negative comments piled up on the company website on Monday, a little more than two months after Netflix raised prices for DVD services. Chief executive Reed Hastings admitted to “arrogance” over failing to adequately explain the changes in an apology that rang hollow to many customers.

Hastings, in a blog post late on Sunday, said Netflix was changing the name of its DVD-by-mail business to Qwikster, the brand that would appear on the company's signature red envelopes, and also offer video games. It will reside separately from the Netflix website, where instant streaming of television shows and movies will be offered. The announcement could cause more cancellations of monthly Netflix subscriptions. The news came a week after the company said it was adding fewer subscribers than forecast because of a price increase 60 per cent for joint streaming and DVD rental service.