Updated from 11:48 a.m. ET to add additional commentary.NEW YORK ( TheStreet) -- Netflix ( NFLX) is making it a habit of alienating subscribers, but this time has it gone too far? The movie-rental giant announced on Sunday that it is splitting the company in two -- creating a new DVD-by-mail company called "Qwikster" and leaving the streaming video service under the Netflix banner. Chief Executive Reed Hastings, in a somewhat confusing note on the company's blog on Sunday, he offered a mea culpa for not explaining the recent price hike and made the announcement of the company's split. But will two services retain subscribers or simply annoy them?
This comes as subscribers have already been flocking to the exits after Netflix raised its most popular DVD-by-mail and unlimited streaming package by 60%. The new price, $7.99 for each per month, went into effect at the beginning of the month. This brings the combo plan to $15.98 from $9.99 per month. As expected, the backlash from subscribers was intense, but it seems even more so than management anticipated. On top of this, Netflix also reached a stalemate with Liberty Starz Group ( LSTZA) to renew its streaming content deal, and will pull its content when the current partnership expires in February. These factors led to Netflix being forced to slash its third-quarter domestic subscriber guidance last week. The company now expects 24 million U.S. subscribers in the July- September quarter, down from its prior guidance of 25 million. The stock plunged 25% following the news, closing on Friday at $155.19, its lowest level since October 2010. And after initially getting a lift on the news, rising as high as $162.99 in Monday's session, Netflix shares were recently trading at $152.75, down another 1.6%. Subscribers are being hit with a triple whammy -- higher prices, less content and now less convenience. Is the Netflix split-up the last straw? Will you continue to remain loyal or stream for the exits? Take our poll and see what the other TheStreet users are saying.
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