Netflix founder and co-CEO Reed Hastings announced Thursday that he would step down after more than two decades at the company.
\nWhile news of his departure comes as a shock, Hastings noted that Netflix has planned its next era of leadership \u201cfor many years\u201d in the announcement, which was shared on the company’s blog.
\nIn 2020, Netflix named Ted Sarandos, who has long led content efforts at the company, as co-CEO alongside Hastings. At the time, Netflix characterized the change as formalizing the way that the company was already operating.
\nNetflix will maintain the co-CEO structure in Hastings’ absence, promoting COO Greg Peters to the tandem role with Sarandos.
\n\u201cIt was a baptism by fire, given COVID and recent challenges within our business,\u201d Hastings said of Sarandos and Peters taking the reins.
\n\u201cBut they’ve both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it’s the right time to complete my succession.\u201d
\nHastings will stay involved with the company as executive chairman of the board, following a precedent shared by other prominent major tech company founders, including Amazon’s Jeff Bezos and Microsoft’s Bill Gates.
\nThe news came shortly before Netflix reported its fourth-quarter earnings. The company beat expectations in Q4, adding 7.7 million subscribers \u2014 well over the 4.5 million it anticipated. The company brought in $7.85 billion during the final quarter of 2022, extending its recent trend of slowing revenue growth.
\nNetflix credited the popularity of content it released in Q4 for the huge subscriber boost, including the \u201cAddams Family\u201d reboot \u201cWednesday,\u201d the stand-alone \u201cKnives Out\u201d sequel \u201cGlass Onion\u201d and the royals documentary \u201cHarry & Meghan.\u201d
\nLike most of tech, Netflix’s stock price has fallen well short of previous pandemic highs over the last year, but the company did recover from its midyear lows of $180 a share, trading at $315 before its Q4 report hit late Thursday.
\nThe company introduced an ad-supported subscription tier in November and Thursday’s report offered the first real glimpse into how that new product might shift the company’s fortunes now that streaming’s early pandemic boom times are over. In the report, Netflix called the launch of its lower-cost ad-supported tier a success for Q4 but noted that it had \u201cmuch more still to do\u201d around the new product.
\nAt CES earlier this month, a Netflix ad executive noted the range of advertisers that the company has already attracted, describing that as a boon for consumers who are eager to offset their monthly costs with a Hulu-like ad-supported subscription.<\/p>\n
Netflix adds 2.41M subscribers, soaring past expectations<\/p>\n