Thanks be to Harry and Meghan: The success of the documentary series about the British prince and his American wife on the streaming provider Netflix has given its founder and co-boss Reed Hastings the opportunity to step down as boss with dignity. The 62-year-old will head the Supervisory Board in the future. He is giving up his position, which he held for a quarter of a century, at a time when his company is back on track. The number of subscribers has recently increased after initially declining at the beginning of last year.
However, the question is how long this situation will last. After all, Netflix has faced powerful competition from providers such as Amazon and Disney. And Hastings had to move away from the original idea of offering good television without advertising. In order to gain more subscribers, there has also been a cheaper subscription package with advertising and a somewhat limited offer for a few months. At the same time, Netflix also wants to take tougher action against users who share their subscription with others in breach of contract.
Hastings once began mailing rental DVDs to subscribers, allegedly because he was annoyed at the $40 fine he had to pay at a video store for a DVD for being late in returning it. The fact that he later radically changed his business model and invented video streaming as a subscription service earned him a lot of recognition. Hastings was considered a cool guy who made guest appearances on many podiums, someone who realized that the internet was changing a lot.
In his company things are open but also tough. “Anyone who gets an A for effort but only delivers a two as a result in the long term will be respectfully dismissed and repaid,” says the 150-strong company pamphlet about the company’s culture. “Anyone who regularly delivers an A, even with relatively little effort, will be rewarded.” Hastings did not shy away from dismissing long-time employees, even friends, if he felt that the performance was no longer up to scratch.
Hastings has hinted for a number of years that he will step aside at some point. He promoted one of his successors, Ted Sarandos, to co-chief executive officer and the second, Greg Peters, to head of day-to-day operations. He has also almost completely given up contract negotiations with Hollywood some time ago and gradually withdrew from day-to-day business. “Even company founders need to evolve,” he wrote on the company blog. “As far as I’m concerned, like any good chairman, I will help Ted and Greg and be a bridge between the board and the board.” The past two and a half years have been a baptism of fire due to the Covid pandemic and the recent difficulties in the streaming business. Sarandos and Peters did “incredibly well”.
Another competitor, YouTube, will soon be coming onto the market
After the past year was largely disappointing for Netflix, the final sprint turned out to be much better than expected. In the three months to the end of December, the streaming service gained 7.66 million new customers – analysts had only expected an average of 4.5 million. Overall, Netflix had 230.75 million user accounts by the end of the year. In addition to “Harry & Meghan”, the series “Wednesday”, as well as the films “Troll” and “Glass Onion” proved to be attractive. Netflix was also satisfied with the start of the cheaper advertising-financed subscription, which has been available since November. “2022 was a difficult year with a bumpy start,” the annual report said, “but a brighter finish.”
However, the competition never sleeps. There’s the mighty Amazon and Disney, not forgetting Apple. And now apparently YouTube wants to get more involved. The Google subsidiary is testing in the USA to offer TV channels as streams financed by advertising.