New York
CNN
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Netflix introduced Thursday that its founder Reed Hastings is stepping down as co-CEO on the firm and can serve as government chairman. Hastings might be changed by co-CEOs Ted Sarandos and Greg Peters.
“Our board has been discussing succession planning for many years (even founders need to evolve!),” Hastings wrote in a weblog publish on Thursday. “As part of that process, we promoted Ted to co-CEO alongside me in July 2020, and Greg to Chief Operating Officer — and in the last 2½ years I’ve increasingly delegated the management of Netflix to them.”
Hastings based Netflix in 1997 and altered the way in which numerous households watched films and exhibits, first with its DVD by mail enterprise and later with its streaming video service.
Under Hastings management, Netflix disrupted legacy film rental firms like Blockbuster and helped shake up Hollywood by kicking off an arms race investing in authentic content material. It additionally survived a notable misstep in 2011 when the corporate briefly deliberate to spin off its streaming service from its DVD enterprise, with the latter to be re-branded as Qwikster.
Last yr, nevertheless, Netflix noticed its inventory and fame take successful after shedding subscribers amid heightened competitors from rival streaming companies. In response, Netflix launched a lower-priced, ad-supported tier for the primary time in its historical past.
Those modifications could also be paying off. In its earnings report on Thursday, the streamer mentioned it added greater than 7.6 million subscribers through the last three months of final yr, properly above the 4.5 million additions it had projected, for a complete of greater than 230 million subscribers worldwide.
The firm mentioned the expansion additionally signifies that its ad-supported subscription providing, which launched in November, has gained traction.
“It’s still early days for ads and we have lots to do,” the corporate wrote in a letter to shareholders. But it famous that engagement is best than what it had anticipated and “we believe the lower price point is driving incremental membership growth.”
Netflix additionally mentioned it plans to “start rolling out paid sharing more broadly” later this quarter, as a part of its effort to crackdown on individuals who share passwords fairly than pay for their very own accounts.
Shares of Netflix rose almost 4% in after-hours buying and selling following the Thursday report.
While Hastings’ transfer away from the CEO spot represents the top of an period of types, Netflix mentioned the management change “makes formal externally how we have been operating internally.” And Hastings added in his weblog publish that Sarandos and Peters have “complementary skill sets, deep knowledge of entertainment and technology, and proven track record at Netflix.”
Sarandos, particularly, has led Netflix’s content material operations since 2000, and pioneered the corporate’s transition into producing authentic content material in 2013. In the method, he has emerged as not only a key chief at Netflix however an influence participant in Hollywood.
“Since Reed started to delegate management to us, Greg and I have built a strong operating model based on our shared values and like-minded approach to growth,” Sarandos mentioned in a press release. “I am so excited to start this new chapter with Greg as co-CEO.”