Reed Hastings to step down as Netflix chief executive after 25 years
Co-founder’s departure follows ‘tough year’, despite boost from Harry & Meghan documentary
‘I’ll be spending more time on philanthropy, and remain very focused on Netflix doing well’
THE co-founder of Netflix is to step down as chief executive after 25 years in charge, capping what the company admitted was a “tough year”.
Reed Hastings said he would move to the role of executive chairman at the streaming company, mimicking the transition taken by fellow Silicon Valley leaders Jeff Bezos at Amazon and Bill Gates at Microsoft.
News of Mr Hastings’ change in roles came as Netflix reported better-thanforecast revenue, profit and subscriber numbers in the final three months of 2022.
The company was boosted by hit shows such as Wednesday and the Harry & Meghan documentary programmes. Netflix said the royal series had been its second most popular documentary package ever.
The better-than-expected subscriber numbers and financials helped allay fears of a slowdown at Netflix, which last year reported its first drop in subscriber numbers.
Shares, which had halved across 2022, rose as much as 8pc in afterhours trading.
In its letter to shareholders, the company said: “2022 was a tough year, with a bumpy start but a brighter finish.”
Mr Hastings, who founded Netflix in 1997 and transformed it into a global video streaming tech giant, said: “The time is right to complete my succession”.
The company’s chief operating officer, Greg Peters, will become cochief executive with Ted Sarandos, who has spearheaded Netflix’s investment into original programming.
Mr Hastings, 62, said: “I’ll be helping Greg and Ted, and, like any good Chairman, be a bridge from the board to our co-ceos. I’ll also be spending more time on philanthropy, and remain very focused on Netflix stock doing well.”
After starting out by mailing DVDS to customers, under Mr Hastings’ leadership, Netflix launched a web streaming app in 2007, before entering into original programming in 2013. His tenure at Netflix was known for its rigorous corporate culture, which aggressively managed out under-performers.
In financial results for the three months ending in December, Netflix said it had added 7m subscribers, bringing its total paying customer base to more than 230m.
Royal sagas real and dramatised boosted its subscriber numbers in the second half of the year.
The debut of the third series of The Crown and the three part docuseries Harry & Meghan, which included exclusive interviews with the Duke and Duchess of Sussex, helped attract new subscribers.
The steaming app’s Harry & Meghan series became the mostwatched subscription TV series of the year, hitting 4.5m viewers during its first week.
Netflix has been battling to maintain its market share as competition for eyeballs increases and the cost of living crisis bites.
Revenues only grew by 1.8pc, to $7.8bn, in the final three months of 2022, among its weakest ever quarters for revenue growth over the festive period. Its operating profit fell to $550m. While weak historically, the performance was better than analysts had forecast.
In November, Netflix launched a new advertising supported subscription, Basic with Ads, which costs £4.99 in the UK and has a limited selection of shows, in a bid to boost paying customers as growth slows.
Meanwhile, the company has also cracked down on password sharing in an effort to force families and households that may have shared an account to pay up.
The streaming giant has come under pressure as consumers tighten their belts and do away with multiple video streaming services to save money.
Netflix also faces rising competition from the fast-growing Disney+ service, which now has 164m paying subscribers.