Reed Hastings had co-founded Netflix in 1997, a small mail-order DVD rental company. A quarter of a century later, and after a trying 2022, the 62-year-old entrepreneur is leaving the operational management of the streaming giant that revolutionized Hollywood. He will become chairman of the supervisory board and give way to his teammate Ted Sarandos, who was already co-CEO, and to Greg Peters, who until now was director of operations.
“Ted and Greg are now co-CEOs. After fifteen years together, we have an excellent team and I have complete confidence in their leadership. Twice the heart, twice the ability to please teams and accelerate growth. Proud to serve as Executive Chairman for many years to come”, he tweeted. In becoming chairman of the supervisory board, Reed Hastings, whose fortune is estimated by Forbes at $3.4 billion, is following a path taken by other billionaire founders, such as Bill Gates at Microsoft and Jeff Bezos at Amazon.
The news was announced by the company on the occasion of the publication of quarterly results, which are both bad and excellent. Bad, because net profit was divided by eleven this quarter, falling to 55 million, while operating profit fell from 630 to 550 million. Earnings per share were affected by the rise in the euro which increased its debt and led to an accounting loss of 462 million. Reassuring, because the number of new subscribers reached 7.7 million for a total of 230 million subscribers, pulverizing the previous forecast of 4.5 million. As a result, in informal trading after the markets closed, the stock yoyoed, gaining between 3 and 9%, between 330 and 340 dollars.
A cheaper subscription
The rebound in subscribers, won mainly outside the United States, comes after the streaming giant introduced a cheaper subscription plan in November 2022 with ads for $7 a month, set up in collaboration with Microsoft, and made the war against loans of passwords which made it possible to have several screens for only one subscription.
“2022 has been a difficult year, with a chaotic start but a brighter end”, writes the company. Netflix had caused an earthquake in the world of media and finance by announcing in April that it had lost 200,000 subscribers in the first quarter, followed by a decline of 700,000 in the second. The action had collapsed from 349 to 226 dollars, the company losing a third of its value overnight. This news signaled the correction of major tech stocks that continued through 2022, hitting Apple, Microsoft and Tesla. This Thursday, January 19, Netflix told its shareholders that it has passed the development phase of its most capital-intensive business and intends to focus now on generating cash.
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