Investopedia: Netflix And Creative Destruction

Few things are easier in business than sticking with what has always worked before. Unfortunately, that is often an open invitation to hungry new competitors to come in, eat your lunch, take your customers and leave you with the bill. To that end, while investors (not to mention customers) may be confused, frustrated or angry with Netflix's (Nasdaq:NFLX) latest moves, they may be exactly what the company has to do to remain a leader in the fast-developing media content business.


Old Wine in New Bottles
Netflix's latest move is to separate its traditional DVD-by-mail business from its newer streaming media business. Management is renaming the DVD business "Qwikster," adding video game rental to the service, and operating it as a wholly-owned subsidiary with its own management and customer service infrastructure.

The Netflix name will now be solely for the streaming business, and the two companies will run quite separately. There will be different websites and customers will see two charges on their credit card statement if they sign up for or keep both services.



Click the link for the full article:
http://stocks.investopedia.com/stock-analysis/2011/Netflix-And-Creative-Destruction-NFLX-DISH-LSTZA-AAPL-AMZN-GME-CSTR0921.aspx