Reed Hastings, the co-founder of Netflix and its CEO in the company’s 25-year history, announced on Thursday that he would be stepping down from the role. It was the end of an era for the company that first killed Blockbuster and then took the lead cable television to bleed slowly.
It was an ending that would have been a long time coming. Netflix used to stand alone in the streaming space, but in early 2023 Netflix faced a messy landscape, dominated by streaming services like Disney+ and HBO Max as well as video platforms. like TikTok and YouTube. Praised for outstanding original hits like Strange things and Wednesday, Netflix’s seemingly endless stream of original content has also been criticized in recent years for valuing quantity over quality. This combination of increased competition and flagged content led to a tumultuous 2022 that slowed the company’s growth.
But Hasting’s departure may show that Netflix is still in better shape than it was a year ago, when it quickly lost subscribers and stock value. The streaming giant made a sudden turn in November after quickly developing a new offer where customers could pay less ($6.99 a month instead of $9.99 for a month). ). basic plan) to stream Netflix content if they agree watch ads. Now, Ted Sarandos, who served as Hasting’s co-CEO, will join Netflix’s chief product officer and chief operating officer, Greg Peters, as co-CEO. They will oversee Netflix’s transition to a new version: If the DVD mailed is Netflix 1.0 and Streaming is 2.0, Netflix runs on ads, disrupting the uninterrupted streaming, with could be Netflix’s third act.
Tony Gunnarsson, advertising, video and TV analyst at Omdia, said of ad subscriptions: “It’s been a huge transformational change for Netflix. “Once you start advertising, you can’t consider it a side job. It cannot be something that just complements another model. It very quickly became the dominant way of doing things.”
Hastings before and many times shoot down the idea of putting ads on Netflix. Hulu has long offered ad-supported streaming, and Disney+ rolled out an ad-supported option in December (Disney is also the majority owner of Hulu). As of 2019, 70 percent among Hulu viewers watched ads instead of paying the full cost of an ad-free subscription. And TikTok and YouTube fans are used to the barrage of ads. After a few years of hiatus, advertisers have returned to your personalized entertainment, and it seems likely they will stay there.
by Netflix services with ads available in dozens of countries spanning North America, Europe, Asia and South America. The company ended 2022 with 231 million subscribers and generated $32 billion in revenue. It says fifth in a letter told shareholders that very few customers had switched from an ad-free subscription to an ad-supported subscription, and that the new offer at a lower price, instead, had resulted in “incremental membership growth.” It ended the year with better-than-expected growth, and it still plans to cut down on password sharing by promoting accounts to a paid sharing option where they can add people. from other households for a fee.
“Netflix is now a much more mature business,” said Sarah Henschel, media and entertainment analyst at Omdia. “They started focusing less on that subscriber growth and more on that revenue growth. It may have to be a trade-off where they lose some subscribers, but end up adding more revenue.”
Hastings speak in his letter that he would continue as executive chairman, a move common for founders to relinquish power. He noted that succession planning has been discussed over the years, and that has led him to share the CEO role in 2020. With doom and gloom to follow Netflix in early 2022 , Hastings is leaving at a time when Netflix is more stable and perhaps entering a new season.
