Can Netflix rebrand its way out of trouble?

With its stock price and its customer base in decline, the company unveiled—in a blog post on Sunday night—its plans to split into two companies: one that delivers movies and TV shows via streaming, which will keep the name Netflix, and another that delivers DVDs via mail, and it is called Qwikster.

Both businesses will be part of the same company—it’s not a spinoff, says Business Insider—meaning this is a rebranding effort. The change will take effect in the next few weeks.

“For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming,” Netflix CEO Reed Hastings explained. The company, he said, wants to avoid the fates of Borders and Aol—organizations that realized too late what their customers wanted.

“Companies rarely die from moving too fast, and they frequently die from moving too slowly,” he said.

The problem for Netflix, Hastings continued, wasn’t necessarily its recent price hike—which drew massive criticism and a flood of unsubscribes—but instead his failure to communicate.

“When Netflix is evolving rapidly, however, I need to be extra-communicative,” he said. “This is the key thing I got wrong.” Hastings apologized for the mistake and insisted that he should have personally explained to members why the company was hiking prices. “I messed up,” he confessed.

What’s the reaction been so far?

TechCrunch pointed out that the Qwikster Twitter account is already owned by someone whose avatar is a pot-smoking Elmo. Did the company check this first?

Meanwhile, the “Say No to Qwikster” page on Facebook has nearly as many fans as the actual Qwikster page.

Back at Hasting’s blog post, readers are destroying him in the comments section. Among their beefs is that the websites for the two new services—Qwikster and Netflix—aren’t integrated.

One of the more constructive commenters wrote: “Reed Hastings, The lack of communication between the two services regarding rating and reviews seems like a huge downfall and I would imagine will be a major complaint.”

Hastings, it seems, is trying to fulfill the promise he made in the post—to communicate better with customers—by jumping in and responding to the comments. To the above comment he replied: “It may be. At least when you start, your current rating and reviews will be in both.”

It doesn’t seem to be helping in the short term, as negative comments pile up.

In his post, Hastings relies on a cliché to help make his point: “Actions speak louder than words” at Netflix, he said.

Here’s another cliché to help explain to Hastings what seems to be happening from a communications standpoint: “Too little too late.”

What do you think of the rebranding effort?

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