Netflix abandons plans to split business

In an illustration of modernity's volatility, in a mere three months Netflix's stock has sunk from record highs. The company's moves to increase monthly fees and split up its online-streaming and movie rental businesses prompted the drop in its stock price, but the firm has since moved to rectify past mistakes.

In an admittance of guilt, Netflix officials sent an email to users on Monday, affirming the company had scrapped plans to split up its two services, and would instead continue to operate under the Netflix brand. Customers will still be able to access both services from the company's website and it pledged to continue to expand its online-streaming offerings.

Bloomberg reports the reversal was an attempt by Netflix officials to reclaim customer goodwill. The California-based firm had long been a darling of Wall Street and a favorite among consumers as a result of its innovative business model and outstanding customer service department.

Nevertheless, the company's attempts to acquire additional content for its streaming department have hit roadblocks over the past year. Traditional media companies have been loath to renew deals with Netflix, and others have endeavored to hike prices as they look to increase their profit margins amid mounting competition.

For its part, Netflix has had to spend heavily to ink deals with distributors and content producers like MGM. The company's deal with Starz, which helped Netflix' online-streaming store to prosper, will not likely be renewed – at least at current prices, executives from the pay movie channel said.

Netflix must now chart a new course on its quest to shore up its business model. The firm could no longer afford to charge $7.99 per month and still achieve a significant profit margin, leading to the price hike. Netflix's simplicity had been one of the company's greatest assets, but its moves to increase customer decision-making backfired, experts assert.

On its blog, Netflix said it had officially abandoned plans to alter its current format, and that customers would not have to have two accounts to access items from its online-streaming and DVD rental services.

"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," according to a company statement. "This means no change: one website, one account, one password… in other words, no Qwikster."