Netflix soars to 230 million subscribers, co-founder steps down. Netflix, the US streaming behemoth, reported on Thursday that it had more than 230 million users worldwide at the end of last year, above analysts’ projections as popular shows like “Wednesday” and “Harry & Meghan” attracted new viewers.
In a letter touting record fourth-quarter results, the business said that “2022 was a challenging year, with a rough start but a better conclusion.”
In addition, Netflix said that co-founder Reed Hastings was stepping down from his position as CEO after 25 years in charge, during which time the business grew from a DVD rental service to a behemoth in the entertainment industry.
Ted Sarandos, who has been the face of Netflix in Hollywood and was previously appointed co-CEO, and Greg Peters, the company’s chief operating officer, were given leadership of Netflix by Hastings.
During an earnings call, Hastings observed, “It feels like yesterday was our IPO; we were covered with red envelopes.”
I hope some of you have owned the stock over the whole 21-year period.
Early in 2002, Netflix went public, with shares initially trading at $15 each.
After the presentation of the financial results, shares of the streaming television service increased by about 7% to $337.31.
Hastings noted in a blog post that the Netflix board has been talking about succession planning for many years, joking that “even founders need to change!”
He said that he will occupy the newly created position of executive chairman, stating that founders of tech giants frequently take on this role, citing Bill Gates of Microsoft and Jeff Bezos of Amazon as examples.
The announcement of the change of guard coincided with Netflix reporting increased subscriptions that far above even the most optimistic predictions.
The streaming behemoth claimed to have attracted 7.7 million new subscribers in only three months, raising the total number of Netflix subscribers worldwide to 230 million.
The “Addams Family” spinoff “Wednesday” was part of a successful slate of new programming that Netflix recognized as being the third most watched show in the company’s history.
According to Netflix, “Glass Onion: A Knives Out Mystery” starring Daniel Craig and the royal tell-all documentary “Harry & Meghan” both performed well.
Compared to the first half of the year, there is a glaring contrast. The next great movie drives subscriptions, according to media and technology researcher Paolo Pescatore.
– New competitors
As customers reduced their leisure expenditure in response to rising prices and an unsteady economy, the new titles helped draw users to a new, more affordable “Basic with Ads” subscription.
The revenue for the three-month period from October to December, $7.85 billion, was in line with forecasts.
Netflix maintains that income should be the primary criterion for gauging the health of the firm rather than the number of new subscribers.
According to Insider Intelligence lead analyst Paul Verna, “What may be getting lost in the mix is that some number of new customers — we don’t know how many — presumably came in on Netflix’s ad-supported tier.”
With Netflix’s ad businesses expanding, he explained, “that means, most likely, lower average revenue per subscriber, which is a number Wall Street will be paying more attention to.”
This year, Netflix wants to “nudge” users who use subscriber-shared passwords to pay their own way.
According to Netflix Chief Financial Officer Spencer Neumann, “We have tremendous confidence in our ability to increase revenue during the course of the year as we grow commercials and we offer paid sharing (of accounts).”
Deep-pocketed competitors like Disney+, which also offers an ad-based subscription, are a serious threat to Netflix.
But despite the difficulties, Netflix is one of the few internet behemoths that has won Wall Street’s faith, with its share price rising by about 50% over the previous six months.
As businesses lay off workers and make cost reductions following a big recruiting and spending spree at the height of the coronavirus outbreak, Disney and other tech titans have taken a beating on the stock markets.