Reed Hastings is off – sort of. The chief executive of Netflix, who has actually been co-chief executive since July 2020, is making the time-honoured “move upstairs” to become executive chairman of the company he co-founded as a DVD rental mailing service back in 1997.
Ted Sarandos, the long-time content chief who became his co-chief executive 2½ years ago, will now share that role with Greg Peters, who has been promoted from chief operating officer, in a completion of his intended succession process.
It was under the watch of Hastings that Netflix effectively created the subscription streaming market, revolutionising how people watch television in the process. It remains the single biggest video-on-demand platform with 231 million subscribers.
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After an admittedly “tough” 2022 in which it dropped more than 50 per cent of its share price value, Hastings was this week understandably keen to focus on the appreciation of Netflix’s stock over a slightly longer term. The company, which was trading above $315 on Friday, first floated on the stock market in 2002 at a price of $15 per share, in an initial public offering (IPO) that “feels like yesterday”, he said.
The exiting Hastings was in notably cheery form on the company’s quarterly earnings video interview on Thursday. It’s not every resigning chief executive who gets to say things like “I could not be happier” and “you know, it’s just a great feeling” with his level of conviction.
Sarandos was also on hand to hail the “steady transition” orchestrated by Hastings (62), saying his were “big shoes for me and Greg to fill” and that he knew Netflix’s new executive chairman would remain a role model, mentor and friend.
“This may be the smoothest transition that we’ve seen in media in quite a while,” observed Jessica Reif Ehrlich, the Bank of America Securities analyst conducting the interview.
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Indeed, in November, then Disney chief executive Bob Chapek was rather abruptly ousted and replaced by the man who had picked him as his successor, former chief executive Bob Iger.
Such high drama has been absent at Netflix. Still, with intense competition in the streaming industry, growth-inhibiting market maturity in some regions, a recession on the cards and an advertising business still in its infancy, the Sarandos and Peters era is likely to usher in some experimentation in its model.
They may not have to “see round corners”, as Sarandos said Hastings could, but a dash of his vision will be necessary if they want Netflix to sustain its success as a standalone company.