Netflix turns the envelope over to Qwikster

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Justin Smith

Netflix’s stock and customer satisfaction has reached a record low after customers were hit with a double-slap: a 60 percent price increase earlier this summer and a new company replacing the DVD portion of Netflix, announced this week.

Netflix said on Monday it will be splitting the company and renaming its DVDs-by-mail service Qwikster. Chatter about the split following the price-hike announcement in July has cluttered online blogs and social networks. Qwikster and Netflix will not be integrated and users will have to visit two websites and pay two bills if they want both services that Netflix provided prior to this month.

“Qwikster will be the same website and DVD service that everyone is used to,” said Reed Hastings, co-founder and CEO of Netflix in an email to Netflix customers. “It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.”

Hours after Netflix announced that instant streaming and DVD rentals would be split into two separate price packages, $7.99 per month for each service, users responded with outrage and dismay. The blog where Netflix detailed the change acquired the maximum 5,000 user comments in only a few hours, while Netflix’s Facebook account received more than 42,000 comments in less than one day. The Facebook post also received 800 “likes.”

“We will probably walk away from Netflix DVDs,” said Jennette Fennimore, a subscriber to Netflix for more than five years. “We will just go to Redbox when we want to rent DVDs.”

Shares of Netflix fell $9.08, or 6.3 percent Tuesday. Earlier, the stock hit a 52-week low of $131.10. The shares are down 54 percent since July 12, when Netflix first announced the price changes.

“I am more disappointed in Netflix than anything,” said Jessica Klemetson of Torrance, Calif. “It seems like we just had a price increase just a few months ago and now we have to pay $5 more.”

Klemetson said she will join others in canceling a portion of her Netflix service.

Around 30 percent of Netflix subscribers either plan to cancel the service or are seriously considering moving to a competitor, according to a survey of 1,000 subscribers by media research firm Frank N. Magid Associates.

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