Netflix CEO Apologizes, Will Split DVD Rentals Into New Company

What do you do if you’ve managed to make your once struggling DVD rental-by-mail company into one of, if not the, biggest rental and content streaming services in the world? Well, if you’re Reed Hastings, CEO of Netflix, you make some poor decisions regarding pricing, apologize for them and split off your DVD rental biz into a completely different company.

That’s just what Reed has done with Netflix’s DVD rental business. He announced this week via the company’s blog that the Netflix will split its DVD and streaming video businesses and rebrand the DVD division as “Qwikster.”

“In hindsight, I slid into arrogance based upon past success,” Hastings said in the blog post. “Now I see that given the huge changes we have been recently making, I should have personally given a full justification to our members of why we are separating DVD and streaming, and charging for both,” Hastings added.

I guess Hastings felt he had to do something what with all the backlash recently over the recently rolled out price hike of 60% which helped drop the company’s stock by almost 50%. Not only that but Starz has also has not renewed its deal with the company which means fewer movies and other content for the service.

Qwikster will be a separate company and will, in addition to movies and TV programs, also offer video game rentals. Expect to see Qwikster.com to go live in the next few weeks.

So, what do we think of this? Is it a good move or the last gasp of a dying company out of touch with customers? Sound off in the comments.