ENTERTAINMENT NEWS
Why has Reed Hastings resigned as CEO of Netflix?
On the same day that the company posted better than expected subscriber results its co-founder stepped down.
Reed Hastings is out as Netflix CEO. Co-founding the company in 1997 with Marc Randolph, Hastings built a streaming empire that originally started out as mail-order DVDs before transitioning into streaming in 2007. The resignation was long-planned and is no surprise, nor a reflection on Netflix’s financial situation.
“In the last two and a half years, I’ve increasingly delegated the management of Netflix to them,” Hastings said in a statement. “It was a baptism by fire, given Covid and recent challenges within our business. But they’ve both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it’s the right time to complete my succession.”
Hastings stays on as executive chairman.
The company also announced its end of year results on Thursday. 231 million memberships included 7.7 new subscibers in the last quarter, trumping expectations as low as 4 million. The company is in a good, if challenging, spot for the new co-CEOs Greg Peters and Ted Sarandos to take into 2023.
What next for the future of Netflix?
The media market has greatly changed since Netflix killed its first big competitor, Blockbuster, in 2014. Now streaming sites are a dime-a-dozen with Paramount, Disney, HBO, and Amazon entering the scene in the last decade. Every company is vying for users money; the more crowded the market, and the worse the economic situation becomes, the harder this is to achieve.
“Reed Hastings stepping down from his current role raises a lot of questions about Netflix’s future strategy,” said Jamie Lumley, analyst at research firm Third Bridge.
“Incoming Co-CEO Greg Peters will have a number of major decisions on his plate from managing high levels of expenses, password sharing, and cracking the code to find the next Stranger Things.”
The beginning of 2022 saw Netflix lose subscribers for the first time ever, though this recovered by the end of the year. Profit on the year was down from 2021.
“2022 was a tough year, with a bumpy start but a brighter finish,” the company said in a statement.