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On Monday, the company said it would reverse a previously announced decision to put its DVD-by-mail and Internet streaming services on separate websites, a plan that was widely derided by Netflix subscribers.
People will be able to use both services under one account and one password, CEO Reed Hastings said Monday in a blog post.
Netflix Inc., however, plans to stick to pricing plans introduced in June, which means subscribers are now paying separately for streaming service and mailed DVDs. That change amounted to a price increase for most subscribers.
Investors saw the reversal as an Oscar-worthy move, sending the stock up $7.68, or 6.6 percent, to $124.89 in midmorning trading after rising as high as $128.50.
Less than a month ago, Netflix said it would split the DVD rental business off to a new website, to be called Qwikster. Subscribers howled at the move, saying they saw Netflix as a destination for movies in general and didn't want to manage two accounts.
"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," Hastings said in the blog post Monday.
Netflix's decision to stay one website is likely to please subscribers. But its turbulent relationship with subscribers over the last three months raises questions about the company's management, as it attempts the transition from a DVD-by-mail business to one that largely delivers movies streamed over the Internet. Netflix movies can already be streamed directly to PCs, smartphones, tablets, DVD players, game consoles and TV sets.
The Qwikster announcement was a follow-up to the July price change. Analysts saw it as a way for Netflix to distance itself from the older DVD business, which has less future potential than Internet streaming.
Netflix had 24.6 million subscribers at the end of June, but it warned last month that it expected a net 600,000 to leave by the end of September because of the price increase. That would be by far the worst downturn in the company's history. Netflix reports final figures on Oct. 24 for the quarter that ended in September.
Even with Monday's bounce, Netflix's shares have been ravaged by the price change and the Qwikster initiative. They've lost more than half their value since July.
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