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Netflix breaking out DVD renting to new company, adding video game rentals

Remember this name because it's Netflix doing video game rentals now.
Remember this name because it's Netflix doing video game rentals now.

With the success of Gamefly, some gamers have wondered why Netflix hasn't jumped into the game rental by mail business. Well, the Netflix CEO just announced a big shake-up in the company that is breaking the DVD-by mail rental portion of the business into its own company that will include video game rentals at launch.

The streaming side of Netflix will keep the same name but the new DVD and video game rental business will be called Qwikster and will have the "website and DVD service that everyone is used to," according to Netflix CEO Reed Hastings.

"One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games," he said. "Members have been asking for video games for many years, and now that DVD by mail has its own team, we are finally getting it done."

While Hastings says that there will be no pricing changes for either the streaming or mail rental businesses, he does not mention how much it will cost to add the video game option nor does he mention a possible launch date. However, he does say in the comments to his post that the game rental pricing will be competitive and that an announcement will be made in the coming weeks.

Qwikster and Netflix will be completely separate entities meaning that customers will go to two different websites, have two different accounts and get billed from two different companies.

The move comes after the negative feedback from consumers and the market over Netflix's recent changes to the plans it offers for streaming movies and renting movies by mail. Hastings apologized not for the moves but instead for how he handled communicating the changes to the company's subscribers and talked of how they realized that the streaming and movie rental sides of Netflix were becoming two different business with their own "cost structures" and "benefits" that needed to be marketed differently. The result is the creation of Qwikster.

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Via: Reed Hastings


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