One of streaming’s most influential figures is stepping away from the spotlight. Netflix co-creator Reed Hastings is stepping down as the company’s co-CEO. Ted Sarandos, who has been co-CEO since July 2020, will share the reins with newly promoted operations chief Greg Peters. The change takes effect today. Hastings says he’ll remain involved as Executive Chairman, serving as a “bridge” between the board of directors and the new CEOs.
The departing leader characterized the move as a long-expected transition. Sarandos and Peters have “increasingly” managed the company for the past two and a half years, Hastings says. This was merely the “right time” to implement a succession that has been in development for years, he adds. Sarandos is credited with leading Netflix’s move into original content, while Peters has been key to forming partnerships and helping the company’s push into gaming.
Hastings’ departure comes as Netflix seems to be slowly recovering from a grim 2022. It lost subscribers for the first time in over a decade, and blamed a combination of fierce competition, limited opportunities to grow and widespread account sharing. In its just-issued fourth quarter earnings report, however, it reported adding 7.66 million new customers, reaching a total of 230.75 million subscribers. That appears to have come at the expense of profit (Netflix made just $55 million in net income), but it’s a marked turnaround from the first half of 2022.
Netflix says the end-of-year performance beat its forecast, and that it’s “pleased” with the early performance of its $7 ad-supported plan. The company isn’t saying how many customers are subscribed to this lower-priced tier. Instead, it credits the better-than-expected results to a strong content lineup that includes the Knives Out sequel Glass Onion, Harry & Megan and the Addams Family spinoff Wednesday.
The company is cautiously optimistic about the first quarter of 2023. It believes it will see a “modest” boost to its subscriber base, and plans to roll out paid account sharing “more broadly” later in the period. In that sense, Hastings is leaving at a good moment for the business he helped create. While Netflix isn’t back to its peak form, it’s in a more stable position that could provide its new leadership with a better start.
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