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San Jose Mercury News

Netflix reverses decision to split its video streaming and DVD services

October 09, 2011

Yielding to uproar from customers and shareholders alike, Netflix (NFLX) on Monday reversed its decision to split off its DVD service and rename it Qwikster. Instead of launching an all-new website for DVD customers, as it promised just three weeks ago, it will maintain one site for both its streaming and DVD services.

Netflix's misstep could be costly because it came as competition is ramping up, said Kurt Scherf, principal analyst at Parks Associates, a market research firm. A revived Blockbuster recently announced its own combined DVD and streaming video subscription service that's tied to Dish Network, its new corporate parent. Meanwhile, Amazon is rapidly augmenting the number of streaming videos it offers through its Amazon Prime service.

"Netflix made a really bad step at a particularly bad time," Scherf said.

From the article, "Netflix reverses decision to split its video streaming and DVD services" by Troy Wolverton

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