Netflix founder Reed Hastings is stepping down as CEO—his 25-year run having been a huge success, despite a dismal 2022. Q4 saw a significant uptick in new subscribers, beating expectations.
Key Details
- Reed Hastings has run Netflix, one of the most successful streaming and distribution platforms in the world, for over 25 years.
- Netflix released its fourth-quarter earnings report this week, showing the company set records and made a slight profit after a tough year and decreased net income.
- Hastings announced in a Thursday shareholder letter that he is stepping away from his position as CEO and shifting to an executive chairman role, handing co-CEO positions to Ted Sarandos and Greg Peters.
- “After 15 years together we have a great shorthand and I’m so confident in their leadership. Twice the heart, double the ability to please members, and accelerate growth. Proud to serve as executive chairman for many years to come,” tweeted Hastings.
Why It’s Important
The streaming revolution proved to be quite precarious in 2022, with major streaming services struggling to break out of the red despite a record-setting year for subscribers and viewership. All major streaming services reported losses. As The Hollywood Reporter notes, Wall Street analysts for MoffettNathanson are saying streaming services are rapidly proving to be an ineffectual replacement to previous content distribution methods.
Netflix has seen much growth in the past year. It added 7.66 million new subscribers in the year’s final three months, released two of its most popular exclusives ever with Glass Onion: A Knives Out Mystery and Harry & Meghan, and launched an ad-supported subscription plan in November, and earned $32 billion in revenue.
It also saw net income shrink to $55 million, down from $607 million the previous year, following a rough first six months of 2022. Even with the new subscribers, the company still net-lost 919,000 subscribers due to a massive wave of cancellations earlier in the year, which late-year signups weren’t enough to make up for.
Notable Quote
“2022 was a tough year, with a bumpy start but a brighter finish. We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing, and building our ads offering. As always, our north stars remain pleasing our members and building even greater profitability over time,” says Netflix.
