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> Am I expected to believe that a technology company cannot figure out how to run two different business arms with a single customer-facing UI/website?

Even worse, the technology company we're talking about already does that and has done it for years.

What's to stop you from switching to Amazon? Have you tried watching a movie on Amazon? Way less usable and its hard to find movies sometimes. Netflix has a way better interface and what I find myself doing is checking on Netflix first, and then only if they don't have it, do I go to Amazon.

I've watched things on Amazon Instant in the past and didn't find it any less usable. In fact, I actually find Amazon more usable since it works on my operating system.

It's kind of a moot point to say "Well, Amazon has a crappier interface, so Netflix is safe", since Amazon can always update its interface to something more friendly. The important point is that Netflix has given up one of the major incentives to use its service -- the integration of DVD and streaming.

I think the parent's point was, that is the case -now-. But that could change with one new release of Amazon's steaming service. Previously, even if Amazon released a new offering, the mailing service added an additional incentive to stay with netflix. Now if Amazon releases a better streaming option, you can simply dump Netflix streaming.

Amazon's streaming movies work great in linux. Even better than youtube fullscreened.

Amazon's online collection is much, much larger than Netflix's online collection. Are you referring only to their Prime service?

What is there to stop me switching to Amazon or other competing streaming service tomorrow?

The quality of those services compared to Netflix.

Netflix realizes that they have to move quickly to cement their dominance in this field over the long term. If they are held back by their legacy business, they are going to die quickly. They would rather risk pissing off their biggest fans than jeopardize their stake in streaming.

I just don't understand this argument. In what real, actual ways is Netflix plausibly "held back" by shipping DVDs to folks? And in what ways is this fixed by spinning that business off in such a way that the exact same people will now run that company?

Because it seems to me that this is a lose-lose proposition, for the reasons stated by the commenters above.

they've also given up on the complete Netflix brand recognition. Going with a completely new name is going to lose all the loyalty they built up. While you can get movies from practically anywhere would may Netflix unique was there streaming and DVD services. This is deadly instance of creating multiple targets for yourself, they were deathly stronger together.