Netflix CEO Apologizes for Rate Increase, Announces Company Will Split Into Two Divisions
In the wake of unpopular rate increases that caused customers to cancel subscriptions in droves and resulted in the company stock nosediving, Netflix CEO Reed Hastings apologized in a blog post on Sunday.
"I messed up," he said. "I owe everyone an explanation ... In hindsight, I slid into arrogance based upon past success."
Hastings then announced the company will split into two divisions -- the DVD-delivery service will be rebranded Qwikster, while the streaming service will retain the Netflix name. Subscribers who have both services now will not see any price hikes to keep them, but will have to do business on two separate websites.
Qwikster will also introduce video games into its offerings, something Hastings said has been long requested by customers.
He closed his blog post with an apology, adding, "Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions."