(PresidentialHill.com)- Reed Hastings, the founder of streaming service Netflix, announced late last week that he would be stepping down as the co-CEO of the company.
He’ll be taking a role as the executive chairman of Netflix. In his place, Greg Peters and Ted Sarandos will serve as the company’s co-CEOs.
Hastings posting a blog story late last week that read:
“Our board has been discussing succession planning for many years (even founders need to evolve!) As part of that process, we promoted Ted to co-CEO alongside me in July 2020, and Greg to Chief Operating Officer — and in the last 2 ½ years I’ve increasingly delegated the management of Netflix to them.”
In 1997, Hastings’ creation of Netflix changed how many households watched shows and movies. The company began by being a direct competitor to video rental stores such as Blockbuster, as it mailed DVDs to households on a rental basis.
Eventually, Netflix transitioned to a streaming service, becoming the pioneer in an industry that completely dominates TV and movies today.
Netflix’s model and major investments in original content completely disrupted multiple media industries. It took many movie production companies away from the box office and directly into the homes of millions of Americans — and people around the world.
The company had a rough year in 2022, with competition becoming fierce, which caused Netflix to lose subscribers. Netflix responded by offering a lower tier of their service, which is less expensive but includes advertising. Until that point, there was never advertising on any of the content on Netflix.
The changes that Netflix made under Hastings seem to be working thus far. The company released its earnings report last week, showing they added more than 7.6 million subscribers in the fourth quarter of 2022. That was nearly double the 4.5 million subscribers it had projected it would add in that timeframe.
All told, Netflix now has more than 230 million subscribers across the world.
In the earnings results, Netflix said that the growth of the company is now re-accelerating, thanks in large part to some of its popular original programming, notably the “Harry & Meghan” documentary about Prince Harry and his wife Meghan Markle.
In a letter that the company wrote to shareholders recently, it said:
“It’s still early days for ads and we have lots to do.”
That being said, the company reported that engagement was better than they expected it to be, and “we believe the lower price point is driving incremental membership growth.”
Last in the first quarter of this year, Netflix said that it planned to “start rolling out paid sharing more broadly.” This is part of the company’s efforts to stamp down on people sharing their passwords with family and friends, which reduces the number of paid subscribers the company could have.
Still, many people are not so sure about where Netflix will go in the future without Hastings leading the company. Third Bridge analyst Jamie Lumley, for example, released a statement that read:
“Reed Hastings stepping down from his current role raises a lot of questions about Netflix’s future strategy. While the subscriber growth numbers are encouraging, revenue growth is sluggish with the backdrop of a potential recession looming on everyone’s mind.”
