Netflix backtracks on Qwikster, will keep DVDs and streaming under the same URL

The Netflix Contrition Tour 2011 continues today, as the company announced today that it won't be spinning off DVD-by-mail rentals into a new company called Qwikster. While the plan for DVD operations to be separated internally appears to still be under way (no word yet on the promised videogame rental option), for customers things will stay the same, with one login and one website. While the retreat will probably prompt even more speculation about the company's true plans, CEO Reed Hastings has issued yet another apology to customers, admitting Netflix may have moved too fast this time.

Another sticky issue that's not so easily dealt with is the recent pricing change that took effect last month. While many speculated at the time about what percentage of customers would see higher prices as a result, spokesperson Steve Swasey reveals it affected about half of the company's subscribers. For the rest who had signed up for the $7.99-streaming only package (an option selected by the overwhelming majority in the quarter before the change) prices didn't go up at all. We have our own ideas about what the pricing should be, but it seems Netflix has finally realized not all customers got the message that it's a streaming company now, and tacking DVDs onto its new primary offering for only $2 extra just didn't work. Since all that uproar Netflix has announced a few new / expanded content deals for its streaming service, with Discovery and exclusive rights to previous seasons of The Walking Dead from AMC. But with renewed competition from the likes of Blockbuster and Amazon only time will tell if it can do enough to stop the subscriber bleeding. The Netflix Q3 earnings report is due October 24th -- think that will be an interesting call to listen in on?

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