After a bumpy year for Los Gato-based Netflix, co-CEO and cofounder Reed Hastings is stepping down but will remain in the role of executive chairman.
"Our board has been discussing succession planning for many years (even founders need to evolve!)," Hastings wrote in a Thursday blog post. "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 2½ years I’ve increasingly delegated the management of Netflix to them."
Hastings refers to his elevation of content chief Ted Sarandos to be his co-CEO, and Greg Peters, who will now become co-CEO with Sarandos. And he says that it's been a "baptism by fire" for both of them the last two years, "given COVID and recent challenges within our business."
Those challenges include the sudden drop in subscribers Netflix saw between late 2021 and early 2022, as people's pandemic viewing habits waned and amid stiff competition from other streaming platforms. (The company also attributed some of that subscriber loss to pulling the service out of Russia at the beginning of the Ukraine war.)
As CNN reports, Hastings picked a moment to step down on a high note, with the company also reporting strong fourth-quarter growth. Netflix says it added 7.6 million new subscribers in late 2022, well above its projections, and the platform now has 230 million subscribers. That's also 8 million more subscribers than the company reported last April — which may be attributable partly to the success of new series like Dahmer and Wednesday.
The company undertook two new revenue-generating initiatives amid its troubles last year, including launching a lower-priced, ad-supported tier — something that Hastings had resisted since the company began doing streaming. The company also began cracking down on account-sharing and launched a higher-priced "family" plan that allows accounts to be shared across households.
Since Hastings co-founded the company in 1997 with Marc Randolph, Netflix has shifted from being a DVD-by-mail service to primarily being a video-streaming platform. And Hastings credits Sarandos with pushing for the move into film and TV production and original content.
"Looking back, Ted had the early foresight and skill to push into original programming, changing our trajectory as a company," Hastings writes. "He then moved quickly to expand into international originals, film, animation, and unscripted — bets that have helped broaden our content slate and which took courage given all the skepticism."
Hastings also credits Peters with launching the advertising initiative, as well the company's recent moves into the gaming space.
Netflix's stock, which hit a pandemic-era high price of $690 per share in October 2021, was down as low as $181 per share in April 2022 following that dismal earnings report. On Friday, the stock was trading up 8.46% at $342.50 per share.