Ted Sarandos and Greg Peters
Netflix announced that Reed Hastings has become Executive Chairman, and Greg Peters has stepped up from COO to become Ted Sarandos’ co-CEO and a member of the Netflix board. In addition to these changes, Bela Bajaria, formerly Head of Global TV, has become Chief Content Officer and Scott Stuber has become Chairman of Netflix Film.
“Starting today, Greg Peters will step up from COO to become Ted’s co-CEO. Going forward, I will be serving as Executive Chairman, a role that founders often take (Jeff Bezos, Bill Gates, etc.) after they pass the CEO baton to others. Ted, Greg and I have been working closely together in different capacities for 15 years. As is common in long, effective relationships, we have all learned how to bring out the best in each other. I look forward to working with them in this role for many years to come,” Reed Hastings said.
“I want to thank Reed for his visionary leadership, mentorship and friendship over the last 20 years. We have all learned so much from his intellectual rigor, honesty and willingness to take big bets – and we look forward to working with him for many more years to come. 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. I am so excited to start this new chapter with Greg as co-CEO,” Sarandos commented.
"I feel humbled and privileged to become co-CEO of Netflix. Ted and I have worked together for many years – building tremendous trust and respect for each other. We're also motivated by the same goal: a desire to better serve our members so that we can continue to grow our business,” Peters added.
● FINANCIAL RESULTS
Netflix announced these new corporate moves when it released its fourth-quarter 2022 financial results, in which the company revealed that it has added 7.7 million of paid net ads during the period, which is down from the 8.3 million the streamer added in the same quarter last year, but higher than the company’s own forecast of 4.5 million.
The company’s operating income during the period was of US$550 million, down from US$632 million in the fourth quarter of 2021. This was above Netflix’s guidance forecast of US$330 million, “primarily due to higher-than-expected revenue as well as slower-than-forecasted hiring.”
For 2022, Netflix finished with 231 million paid memberships and generated US$32 billion in revenue, US$5.6 billion in operating income, US$2.0 billion of net cash from operating activities, and US$1.6 billion in free cash flow (FCF).
● DEMAND FOR ORIGINAL CONTENT
While Netflix reported its earnings, Parrot Analytics revealed that, after nine consecutive quarters of growth, the total demand for original content on Netflix reversed course and shrank in the fourth quarter of 2022, down 4.1% compared to the third one.
According to Parrot, after record breaking demand for “Stranger Things” in third quarter, this is not a major surprise. The total demand in the fourth quarter of 2022 was still 1.85% higher than in the second quarter of 2022, thanks to a new season of “Emily in Paris” and breakout smash hit “Wednesday,” among others.
Furthermore, during the year 2022, Netflix had the most in-demand overall catalog at 17.7% share with US audiences. This broader look at the streaming landscape shows a more competitive field than demand for original TV content only, with a clear “Big Three” – Hulu (15.5%) and HBO Max (15.2%) are both within striking distance of Netflix.
However, when factoring in potential future platform consolidation at both Disney and Warner Bros. Discovery, Netflix would fall into third place. Hulu and Disney+ combined would be 24.1%, while HBO Max and Discovery+ combined would be 19.4%, both outpacing Netflix’s 17.7%.
At the same time, in Q4 2022, Netflix’s global share of demand for original TV content fell below 40% for the first time ever, dropping to 39.6%. In the United States, Netflix’s share dipped to 40.9% from 41.5%, but that was still ahead of the US record low of 40.5% in Q2 2022.
Going forward, I will be serving as Executive Chairman, a role that founders often take (Jeff Bezos, Bill Gates, etc.) after they pass the CEO baton to others.” Reed Hastings Executive Chairman at Netflix