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Netflix Cans Qwikster But Still Stiffs Customers:
Since its inception in 1997 Netflix has ruled the movie rental industry by introducing digital distribution of movies available through various home entertainment devices. A great low-price plan for both internet streaming and DVD rental has enabled the Los Gatos, California-based company to maintain its position at the top despite earnest efforts by prior champions Blockbuster Videos to compete. Yet in September 2011 the company endured a sharp decline in popularity shortly after CEO Reed Hastings announced that DVD rental would be turned over to a subsidiary company named Qwikster, while Netflix would exclusively provide internet streaming. Customers who enjoyed both services would now have to maintain two accounts and receive separate bills.
Most people did not approve as evidenced by quickly declining subscriptions and stock share prices. Hastings recanted the decision stating in a blog post recently, “It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.” However he hasn’t exactly recanted the decision to charge separately for DVD rental and internet streaming. The popular “1 DVD at a time/unlimited streaming” plan jumped from $9.99/month to $15.98/month with the option of choosing one service or the other at $7.99/month. Perhaps they are still available in the same place, but clearly each service is being charged separately regardless. Well, nothing is safe from inflation!