Reed Hastings is stepping down from his role as co-chief executive of Netflix, the firm he helped found more than 25 years ago. His announcement came as Netflix announced a big rise in subscriber numbers at the end of last year.
With money tight, people were expected to cut back on streaming services. But Netflix bucked that trend, adding more than seven million new subscribers, far more than analysts expected.
Harry and Meghan’s revelations were a big draw, as was new Addams Family spin-off series Wednesday, and the film Glass Onion.
“2022 was a tough year, with a bumpy start but a brighter finish,” the company said in a statement.
Mr Hastings’ long-planned move means he is leaving Netflix in a crowded market, with challenges ahead, but with 231 million viewers signed up around the globe.
Mr Hastings, who was an early pioneer in the streaming business and is seen as one of the original tech industry disruptors, will stay on as executive chairman.
The firm will now be run by Ted Sarandos and Greg Peters, both already in senior executive positions.
“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.”
Mr Peters has been given a strong start, with total subscribers for the last three months of 2022 up 7.66 million, when the firm had predicted a rise of around 4.5 million.
In early 2022, Netflix faced an uphill battle. It was facing increased competition from rivals such as Amazon, HBO, Apple TV and Disney. It cut hundreds of jobs, but still found it had to put up prices to customers to cover rising costs. That dealt a blow to its subscriber numbers in the first half of the year.
In November, it introduced a cheaper ad-supported option in 12 countries, including most of Europe, the UK and the US,and signalled it would be less tolerant of password sharing in future. Netflix said it was “pleased with the early results” from the service.
Netflix shares, which had fallen by nearly 38% in the past year, rose in after-hours trading following the results announcement. Netflix started out in 1997 as a mail-order film service. Customers ordered via the website and DVDs were posted to them at home.
Mr Hastings has sometimes said the idea for Netflix was sparked when he owed a large fine for forgetting to return a video cassette to rental shop Blockbuster and thought a model more like gym membership, with a monthly fee for renting films, would be better. However, his co-founder Marc Randolph reportedly disputed this version, saying the pair had simply aimed to emulate Amazon.