Technology History | 100 Winchester Circle — Qwikster Was Cancelled Before It Ever Opened

In July 2011 the $9.99 plan that bought both streaming and discs became two plans at $7.99 each, which for anyone who wanted both was a rise of about sixty percent.

Two months of complaint later, on 18 September, Reed Hastings published an explanation from this building. It opened with four words: I messed up.

The post apologised for the manner of the announcement rather than the price, then went further than anyone expected and split the company. The DVD-by-mail business would become a separate service called Qwikster, with its own site, its own account and its own password.

Subscribers had joined a company whose whole promise was one queue.

The naming had been done in a hurry. Within a day reporters found that Netflix had secured the Qwikster domain but neither a trademark nor the Twitter handle, which belonged to a stranger whose avatar was Elmo smoking a joint.

On 10 October, twenty-two days after the announcement, Netflix cancelled Qwikster. It never opened for business, and the price rise stayed.

The bill came anyway. Netflix ended September with 23.8 million subscribers in the United States, about 800,000 fewer than in June, and when it reported that on 24 October the shares fell roughly 35 percent the next day.

From a July high near $300 the stock had lost about three-quarters of its value by November.

What Hastings gave up was the packaging, not the argument. Streaming was the future and DVDs were the declining business, and both halves of that turned out to be right.

The discs kept the Netflix name and went on arriving in red envelopes for another twelve years, until the last of them was mailed on 29 September 2023.

Photo: Coolcaesar, CC BY-SA 4.0, via Wikimedia Commons, showing 100 Winchester Circle in 2019, eight years after the announcement