TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

Well, you can’t blame Netflix for moving too slow.

Netflix’s Reed Hastings announced on their blog tonight that they are separating their streaming and DVD rental businesses:

So we realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently. It’s hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best: In a few weeks, we will rename our DVD by mail service to “Qwikster”.

I suppose you could read this as a panicked move in response to the steep decline of their stock after news came out that they would lose Starz’s movies for their streaming service, but I don’t think that’s it. If anything, this move could further destabilize their stock, rather than reassure investors—it’s a huge change, and if you’re down on Netflix’s streaming business, you’re going to be even more negative on the company as a whole after this.

They want out of the DVD rental business and this is a large step toward the day when they’re out of it completely.