Netflix Survives Qwikster

In September 2011, Netflix CEO Reed Hastings made one of the most baffling decisions in corporate history. He announced that Netflix would split into two separate companies: Netflix for streaming and 'Qwikster' for DVDs by mail. Customers would need two accounts, two logins, and two bills. The internet erupted. Netflix lost 800,000 subscribers in a single quarter -- the first subscriber loss in company history. The stock plummeted from $300 to $53, a drop of over 80%.

Hastings killed Qwikster within three weeks, issued a public apology, and got back to work. But the damage seemed done. Analysts wrote Netflix's obituary. Blockbuster's ghost was laughing.

Then Netflix did something no one expected: it went all-in on original content. House of Cards debuted in February 2013 and changed television forever. For the first time, an entire season was released at once. Binge-watching became a cultural phenomenon. Orange Is the New Black followed. Then Stranger Things, The Crown, Narcos. By 2018, Netflix had more subscribers than cable TV. The stock recovered from $53 to over $700. Netflix didn't just survive the Qwikster disaster -- it used the near-death experience as a catalyst to reinvent the entire entertainment industry.