© Reuters. FILE PHOTO: Reed Hastings, founder and Co-C.E.O. of Netflix, arrives at the DealBook Summit in New York City, U.S., November 30, 2022. REUTERS/David ‘Dee’ Delgado
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By Lisa Richwine and Dawn Chmielewski
LOS ANGELES (Reuters) – Netflix Inc (NASDAQ:) co-founder Reed Hastings announced on Thursday he will step down as chief executive, handing the reins of the streaming service to his longtime partner and co-CEO, Ted Sarandos, and the company’s chief operating officer, Greg Peters.
Shares of the company, which had fallen nearly 38% in the past year, rose 7.9% to $340.66 in after-hours trading.
Sarandos and Peters will share the title of chief executives, with Hastings serving as executive chairman. The change is effective immediately, representing the culmination of a decade of succession planning by the board. Both Peters and Sarandos were promoted in July 2020, amid a challenging time for the company.
“It was a baptism by fire, given Covid and recent challenges within our business,” Hastings wrote in a blog post announcing his departure. “But they’ve both managed incredibly well … so the board and I believe it’s the right time to compete my succession.”
Hastings made his exit as Netflix reported it added 7.66 million subscribers in the fourth quarter, beating Wall Street forecasts of 4.57 million with help from “Harry & Meghan” and “Wednesday” in the battle to attract streaming television viewers.
The streaming video pioneer has been under pressure from restrained consumer spending and competition from Walt Disney (NYSE:) Co, Amazon.com Inc (NASDAQ:) and others spending billions of dollars to make TV shows and movies for online audiences.
Netflix lost customers in the first half of 2022. It returned to growth in the second half, but new customer additions remains below the pace of recent years.
To kickstart growth, Netflix introduced a cheaper, ad-supported option last November in 12 countries. It also has announced plans to crack down on password sharing.
The company’s global subscriber base hit 231 million at the end of December.
Audiences flocked to Addams family tale “Wednesday,” the third-most watched show in Netflix history, the company said. Murder mystery “Glass Onion” and British royals documentary “Harry & Meghan” also were hits during the quarter.
Net income fell to $55 million or 12 cents per share, from $607 million or $1.33 per share a year earlier. Revenue rose 1.9% to $7.85 billion, in line with expectations.
Bela Bajaria, Netflix’s head of global television, was named chief content officer.
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