Netflix CEO Reed Hastings steps down
Hastings left as Netflix announced that it added 7.66 million subscribers in the fourth quarter, above Wall Street expectations of 4.57 million thanks to the success of "Harry & Meghan" and "Wednesday" in the competition to draw viewers for streaming television.
In order to transfer the keys over to longtime partner and co-CEO Ted Sarandos and chief operating officer Greg Peters, Netflix Inc. co-founder and CEO Reed Hastings resigned from his position as the company's chief executive. In after-hours trading, Netflix shares increased 6.1% to $335.05 as the pioneer of streaming video also revealed that it had gained more customers than anticipated at the end of the previous year.
As a result of losing consumers in the first half of 2022, the company has been under pressure. Its stock, once a favourite on Wall Street, has decreased by about 38% in the previous 12 months.Hastings will serve as executive chairman and share the role of chief executive with Sarandos and Peters. The decision, which is the result of ten years of board succession planning, is effective right away. Peters and Sarandos both received promotions in July 2020, which came at a difficult time for the business.
Given Covid and previous difficulties in our business, it was a baptism by fire, according to Hastings. But they've both managed exceptionally well, so the board and I agree that my succession is now appropriate.Hastings left as Netflix announced that it added 7.66 million subscribers in the fourth quarter, above Wall Street expectations of 4.57 million thanks to the success of "Harry & Meghan" and "Wednesday" in the competition to draw viewers for streaming television.
However, earnings per share were only 12 cents, falling short of the 45 cents that Refinitiv's poll of analysts had predicted.
Through March, Netflix predicted "moderate" subscription growth. With the aid of new revenue streams, it anticipated 4% year-over-year growth in revenue during the term.
Walt Disney Co., Amazon.com Inc., and other companies are investing billions of dollars to produce TV series and movies for online audiences, putting the corporation up against constrained consumer spending and competition.Customers stopped using Netflix in the first half of 2022. The second half saw a return to growth, but the rate of new client additions is still below that of recent years. In November, Netflix launched a less expensive, ad-supported option in 12 nations to jumpstart growth. Plans to cut down on password sharing have also been made public.
"A challenging year, 2022 had a rocky beginning but a promising end. We think we're on a good road to speeding up our revenue growth "In its quarterly letter to shareholders, Netflix stated.According to Peters, Netflix will begin introducing new features this quarter in an effort to turn more password-sharing users into paying customers. He recognised that it won't be a "everyone's favourite move," likening it to a price hike that will initially cause more cancellations but end up generating more income.
At the end of December, the firm had 231 million subscribers worldwide.Wednesday, the third-most watched programme in Netflix history, had a large audience, the firm claimed. The British royals documentary "Harry & Meghan" and the murder mystery "Glass Onion" both enjoyed success during the quarter.
From $607 million or $1.33 per share a year earlier, net income decreased to $55 million or 12 cents per share. Revenue increased 1.9% to $7.85 billion, as predicted.
Hastings, 62, co-founded Netflix in 1997 as a DVD-by-mail company after becoming frustrated after returning a rental of "Apollo 13" to the neighbourhood Blockbuster video store and being charged a $40 late fee."Our IPO seems like it happened just yesterday. Red envelopes were all over us "Hastings stated in a post-earnings video interview on Thursday.
In 2007, the company transformed into a video streaming service that upended Hollywood and forced Netflix's media competitors to pour billions of dollars into their own offerings.
Hastings created some of his own problems when he decided to spin off the DVD division of the business into a separate entity called Qwikster. The company lost 800,000 users as a result of the 2011 move, and the price fell sharply.When Netflix disclosed its first subscriber loss in more than ten years in April 2022, the executive had to negotiate another sharp stock decline. This compelled Hastings to reevaluate previously forbidden growth-promoting ideas, such as an ad-supported version of the service.
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