Netflix announces the Qwikster split
Netflix announced that its DVD-by-mail operation would become a separate service called Qwikster while the Netflix name would remain with streaming.
Historical context
Netflix was trying to migrate from its highly successful DVD subscription business toward internet delivery without being trapped by its legacy operation. At the same time, customers were reacting negatively to price changes that separated DVD and streaming subscriptions.
What happened
Reed Hastings announced that Netflix intended to separate its DVD and streaming businesses, with the postal operation renamed Qwikster and placed on a separate website. The plan followed a controversial pricing change and explicitly positioned streaming as Netflix's strategic future.
Consequences
The Qwikster plan became one of the most famous strategic reversals in digital media and was abandoned within weeks. Despite the failure, the episode made Netflix's streaming-first direction unmistakable and became a case study in the risks of forcing a business-model transition faster than customers will accept.