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Netflix to Split Off DVD-By-Mail Service as 'Qwikster'

Netflix swung into full damage-control mode, with CEO Reed Hastings telling customers "I messed up" in communicating the company's decision to split off the DVD and streaming service -- while also announcing Netflix will completely separate the DVD-by-mail service under a new brand, Qwikster.

"It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes," Hastings wrote in a blog post Sunday and in an e-mail sent to customers.

Last week, Netflix said it expects to lose about 600,000 U.S. customers for the third quarter of 2011 -- which would be only its second-ever subscriber decline -- following a pricing-plan change that went into effect Sept. 1. That sent Netflix's stock plummeting 26% in two days.

On Monday, Netflix stock was up about 4.5% in mid-morning trading, to $162.20 per share.

In July, Netflix made many customers furious after eliminating the combined DVDs-by-mail and streaming plans. Netflix now offers U.S. customers the streaming-only plan for $7.99 per month, as well as DVD plans starting at $7.99 per month for one disc out at a time.

Click here to read the full story at Multichannel News.