Netflix delivered a one-two punch with last week’s dual announcements of better-than-expected fourth-quarter earnings and a reorganization at the top level of the company’s leadership. Taken together, these updates convey a company that is accelerating through a fundamental transition.
Netflix’s Q4 earnings and growth were significantly better than expected, adding 7.7 million new subscribers worldwide during the period. This surge in subscribers was attributed in part to a successful launch of a less expensive ad-supported tier of service, which debuted in early November. In the first few days of its availability, Netflix saw the fastest growth in new subscriptions since the early days of the pandemic.
Company execs also point to the success of new programming such as the high-profile series “HARRY & MEGHAN” and “WEDNESDAY” and the feature GLASS ONION, Netflix’s blockbuster sequel to Lionsgate’s 2019 original KNIVES OUT. In 2023, Netflix expects substantial new revenues and subscriber growth to come from a successful crackdown on unauthorized password sharing.
As for the executive suite, Founder and Co-CEO Reed Hastings will cede his CEO role to Greg Peters, who has previously served as the company’s Chief Operating Officer and Chief Product Officer. Hastings will continue as executive chairman. He explained the move to hand off his CEO responsibilities as “long-in-the-making succession plan.” In 2020, Hastings elevated his long-time collaborator Ted Sarandos to the role of co-CEO, and now he is handing his remaining day-to-day responsibilities to Greg Peters.
Some are speculating that another factor in Hastings’ decision was that he was cool to several new initiatives at the company. For years, he had vowed that Netflix would never show advertising to its subscribers, and would not undertake a draconian crackdown on password sharing.
See also: Netflix’s Reed Hastings Will Cede Co-Chief Executive Role (New York Times)