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Netflix hits rewind on break-up plan

posted 10 Oct 2011, 12:04 by Mpelembe   [ updated 10 Oct 2011, 12:05 ]

Online video streaming and DVD rental company Netflix has announced it will not go ahead with a harshly criticized plan split its two video services into two separate companies, with different websites.

USA-BUSINESS UPDATE - Netflix is pushing the rewind button when it comes to its break-up plan.

The online video streaming and DVD rental company is scrapping plans to break-up those two services into two separate companies. The change in tactic was announced on a blog by Netflix CEO Reed Hastings.

The change of heart is likely in response to severe criticism from customers and investors. The stock is down some 60 percent since July.

Netflix will now keep both services under one roof at, dropping plans for another web service called Qwikster. The move would have forced current customers to create a separate account for the new service; instead Netflix says customers will use "one website, one account, one password."

Netflix's original strategy was to spin-off its faster growing online business as competition heats up for viewers and content providers ask for more cash.

Conway Gittens, Reuters