Well they are also trying to go after the gamefly dollar.
True, but the manner in which they've decided to do so is going to alienate their customers. Kind of hard to go after anyone else's dollar when you lose your current customer base.
I would assume that the majority of Netflix customers use both the DVD and streaming features. This is mostly due to the fact that you can't get newer releases via the streaming method.
Aside from that, the second largest group of customers is probably made up of people who don't have the internet connection and/or devices which allow them to stream. Those people probably only get the DVD service.
So, Netflix is going to lose all of its revenue from DVD only customers, as they won't be offering that service anymore. Those people who don't want to maintain and pay for two separate accounts with two separate companies will probably cancel one or both accounts, leaving Qwikster and/or Netflix with less of the market.
I understand the idea of focusing on each separate service so as to increase revenue, and even to take money from other services like GameFly. I just don't see why there couldn't have been a division of labor within one company, instead of splitting the whole thing into two companies, thereby pissing off customers.