The general consumer reaction to Netflix’s decision to fully separate its DVD mailing and streaming services last month was (put mildly) overwhelmingly negative.

Customers were already quite riled up about the company’s recent decision to split its services – thus raising the cost for people still interested in utilizing both the mailing and streaming options – and the additional inconvenience of having said services become separate brands… well, it ended up just being fuel on the metaphorical fire.

Netflix CEO/co-founder Reed Hastings has released a statement (via the Netflix blog) revealing that the company has scrapped plans to restructure its DVD mailing service as a spinoff company called Qwikster – in reaction to the negative response said plans prompted from its users.

Here is Hastings’ official statement on the matter:

It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.  This means no change: one website, one account, one password… in other words, no Qwikster.  While the July price change was necessary, we are now done with price changes.

We’re constantly improving our streaming selection. We’ve recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we’ve added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS.

We value our members, and we are committed to making Netflix the best place to get movies & TV shows.  Thank you.

Those who felt the general response to Netflix’s previous announcement was overblown – and those who were infuriated over said plans – can probably agree: this is at least a step in the right direction for the company. While Netflix has simultaneously been in both damage control and renovation mode since its price hike this past summer, the announcement concerning the formation of Qwikster ultimately proved to be ill-timed… even though it’s still possible those plans could be carried out at a later date.

What do you think of this latest development in Netflix’s restructuring plans? Will it allow the company to recover with relative ease, in terms of raising its stock prices and subscriber count? Or is it going to take a while before Netflix returns to its previous levels of growth and profit?

Source: Netflix