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.