Reed Hastings, Founder And CEO Of Netflix Resigned After Successfully Increasing The Company's Revenue

Netflix Inc founder Reed Pier will step down as chief executive or CEO. (photo: twitter @reedhastings)

JAKARTA - Netflix Inc co-founder Reed Hastings said on Thursday, January 19, that he will be stepping down as chief executive or CEO, handing over control of the streaming service to longtime partner and co-CEO Ted Sarandos and the company's chief operating officer, Greg Peters.

The company's shares, which have fallen nearly 38% in the past year, are now up 6.1% to $335.05 a share in after-hours trading as the video streaming pioneer also said it had gained more subscribers than expected by the end of the year. then.

Netflix is ​​under pressure after losing subscribers in the first half of 2022.

Sarandos and Peters will share the chief executive title, while Hastings serves as executive chairman. The changes take effect immediately, the culmination of a decade of succession planning by the board. Both Peters and Sarandos were promoted in July 2020 amid difficult times for the company.

"It was a baptism of fire, given Covid and the recent challenges in our business," Hastings said in a statement. "But they've both done very well, so the board and I believe it's the right time to compete in my succession."

Hastings exited as Netflix said it added 7.66 million subscribers in the fourth quarter, beating Wall Street estimates of 4.57 million with help from "Harry & Meghan" and "Wednesday" in the battle to attract streaming television viewers.

Earnings per share, however, came in at 12 cents, below the 45 cents expected by analysts surveyed by Refinitiv.

Netflix is ​​projecting "modest" gains in subscribers through March. It forecasts 4% year-over-year revenue growth during the period with the help of new revenue streams.

The company faces controlled consumer spending and competition from Walt Disney Co, Amazon.com Inc and others who spend billions of dollars to make TV shows and movies for online viewers.

Netflix lost subscribers in the first half of 2022. Growth returned in the second half, but new subscriber additions remain below the pace of recent years.

To kickstart the growth, Netflix introduced a cheaper ad support option last November in 12 countries. They have also announced plans to crack down on password sharing.

"2022 was a rough year, with a bumpy start but a brighter ending. We believe we have a clear path to accelerate our revenue growth again," Netflix said in its quarterly letter to shareholders. The company's global customer base reached 231 million at the end of December.

According to Netflix, viewers are now flocking to the Addams family story "Wednesday", the third most-watched show in Netflix history. The murder mystery "Glass Onion" and the British royal documentary "Harry & Meghan" also hit during the quarter.

Net income fell to US$55 million, or 12 cents per share, from US$607 million, or 1.33 per share in the previous year. Revenue rose 1.9% to US$7.85 billion, in line with expectations.

Hastings, 62, co-founded Netflix as a DVD-by-mail business in 1997, said the idea stemmed from his frustration with returning his "Apollo 13" rental to a local Blockbuster video store and receiving a $40 late fee.

The business grew in 2007 into a video streaming service that rocked Hollywood, prompting media rival Netflix to invest billions in their own service.

Some of Hastings' challenges were self-inflicted, such as his plans to turn the company's DVD business into a new company called Qwikster. The 2011 initiative cost the company 800,000 customers and sent stocks plummeting.

The executive experienced a sharp decline in stock in April 2022, when Netflix reported its first loss of subscribers in over a decade. This forced Hastings to reconsider previous ideas to spur growth, including an ad-supported version of the service.