Leader Change – The Netflix Earnings Report
At last, there is only one remaining founder out of the well renowned “FAANG” companies. Steve Jobs left Apple in 2011 a few months before he passed away, handing the mantle to Tim Cook. Google saw Sergey Brin and Larry Page depart in December of 2019, a year and a half before then-world’s richest man Jeff Bezos left Amazon. Between Netflix and Facebook, the public would likely want Mark Zuckerberg gone first, but he is indeed the last-standing cofounder out of the classic Big Tech Names.
On Thursday, it was announced in conjunction with their earnings report that Netflix founder Reed Hastings will be stepping down as co-CEO and will now take an Executive Chairman role in the company. This comes with a major earnings beat for Netflix, adding 7.7 million subscribers in what was a great way to end a shaky 2022 for the company. It’s amazing to see how far Hastings brought the company from a DVD-by-mail business to introducing the world of streaming, which is now one of the most competitive industries. Hastings went from getting rejected by Blockbuster for a buyout deal to stepping over the company’s grave on their way to the top, but the future provides a new landscape for Netflix that they must adjust to. Now that the industry has so many large players, investors are looking for profitability instead of subscriber growth, and this explains the recent moves Netflix has looked into. According to the earnings report, the ad tier has had a good start so far, and they are still looking into how to fully tackle the account sharing problem. Fortunately for Netflix, they will still have Hastings at their side in a similar role Bezos currently serves for Amazon, and his expertise will help steer the streaming giant into the future.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.