One of the industry’s most powerful figures is stepping away from the spotlight. Reed Hastings, co-founder of Netflix, is stepping down as co-CEO. Ted Sarandos, who has been co-CEO since July 2020, will be joined at the helm by newly promoted operations chief Greg Peters.
The change is effective immediately. Hastings has stated that he will continue to be involved as Executive Chairman, acting as a “bridge” between the board of directors and the new CEOs.
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The departing leader described the change as a long-awaited transition. Hastings claims that Sarandos and Peters have “increasingly” managed the company over the last two and a half years.
He adds that this was simply the “right time” to implement a succession plan that had been in the works for years. Sarandos is credited with spearheading Netflix’s move into original content, whereas Peters has been instrumental in forming partnerships and overseeing the company’s push into gaming.
Hastings’ departure comes at a time when Netflix appears to be slowly recovering from a bleak 2022. It lost subscribers for the first time in more than a decade, blaming a combination of increased competition, limited growth opportunities, and widespread account sharing.
However, in its recently released fourth-quarter earnings report, it reported adding 7.66 million new customers, bringing its total subscriber base to 230.75 million. This appears to have come at the expense of profit (Netflix earned only $55 million in net income), but it’s a significant improvement over the first half of 2022.
Netflix says its end-of-year results exceeded its expectations, and it’s “pleased” with the early performance of its $7 ad-supported plan. The company isn’t saying how many customers have signed up for this lower-cost tier.
Instead, it attributes the better-than-expected results to a strong content lineup that includes the Knives Out sequel Glass Onion, Harry & Meghan, and Wednesday, a spinoff of the Addams Family.
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The company anticipates a positive first quarter of 2023. It expects a “modest” increase in subscriber numbers and plans to roll out paid account sharing “more broadly” later in the period.
In that sense, Hastings is departing at an advantageous time for the company he helped found. While Netflix isn’t back to its peak, it is in a more stable position that could provide a better start for its new leadership.