New York, Dusseldorf won first Netflix-Co-founder Reed Hastings made a living mailing DVDs. But the manager recognized the transmission’s potential early on. In 2007, ten years after the company was founded, he made Netflix to a streaming provider. Later, the group also produced their own content.

Hastings thus revolutionized the entire media industry. Videos on demand are indispensable today. Because the Los Gatos, California-based company grew rapidly over the years, this caused numerous competitors to pour billions into comparable deals. Today Netflix has with Disney Y Amazon strong competitors. German television stations are now also investing more in broadcasting.

Now ends an era in the streaming business. After two decades at the helm of the trailblazer, the 62-year-old is stepping down as chief executive and now concentrating on his role as head of the board of directors, a position in which he continues to wield great influence.

On Friday night, Hastings handed over management of the company to Greg Peters, who until now has been responsible for the day-to-day business. Ted Sarandos, whom Hastings had already promoted to dual leadership in 2020, remains as co-chief. “Honestly, the two of them have run the company more and more,” Hastings wrote on the company blog. The founders also need to develop further.

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“Hastings’ departure as CEO seems well-prepared and long-planned,” says streaming expert Bernd Riefler, founder of Munich-based analytics company Veed Analytics. It is positive that the replacement comes from our own ranks.

After a decade of growth, the stock price collapsed in 2022

Netflix developed rapidly under Hastings, as can be seen from the share price. The issue price was $15 in 2002, today the paper is trading at more than $330. However, after a decade of growth, it weakened last year. The share price collapsed by 50 percent in 2022. User growth was the lowest since 2011.

>> Read also: Almost a million fewer customers: Netflix loses subscribers again, but competition grows

Netflix also suffered due to increasing competition from Disney and Amazon under a dwindling audience. Also, money for streaming services is no longer as easy for customers as it used to be due to rising inflation.

As growth slowed, Hastings became more involved in day-to-day operations. Employees had previously reported that the founder was significantly less engaged.

Hastings’ departure as CEO seems well prepared and well planned. Bernd Riefler, founder of the analysis company Veed Analytics

He had recently broken with his principles. For a long time, Hastings blocked advertising on the service. Due to declining customer numbers, Netflix introduced a cheaper subscription in the fall, where viewers pay less but have to accept advertising.

>> Read also: An ad subscription is not a sure hit for Netflix

Hastings says goodbye to the post as the number of subscribers increases. The number of users increased by 7.66 million to 231 million in the fourth quarter. The growth was about double what was expected, mostly thanks to the real documentary “Harry & Meghan” or the mystery series “Wednesday”.

However, new customers appear to sign up for the cheaper ad subscription, with which Netflix earns significantly less. Existing subscribers would rarely switch from the expensive fees, he said. Revenue rose 1.9 percent on-year to $7.85 billion. However, net income fell from $607 million to $55 million in the fourth quarter.

Successors take over in difficult times

Falling revenue shows: Hastings’ successors take over management in troubled times. The competition will intensify, the transmission boom caused by Corona has subsided.

Netflix

Competition from the streaming pioneer is getting stronger.

(Photo: AP)

Netflix is ​​trying to boost its profits by cracking down on the unauthorized sharing of passwords in a home. Netflix expects 100 million users to do this. Those affected will have to pay a surcharge in the future.

“It won’t be a popular move,” admitted co-chief Peters, who is one of the architects of the entry into the advertising business. Therefore, some users are expected to leave Netflix, at least temporarily.

Business partner Sarandos hopes above all that the show will be attractive: “If the content works, the business will work. However, Netflix has to invest a lot of money in new productions for that.”

Netflix: tough management culture, but plenty of freedom

Meanwhile, Hastings has more time for other tasks outside of the business. He takes care of charity activities. He and his wife Patty Quillin, a producer, donated $120 million to colleges for black students.

Hastings was born in Boston in 1962. Before beginning his studies, he sold vacuum cleaners on his doorstep. In 1983 she completed her mathematics studies at the traditional Bowdoin College in the US state of Maine.

Hastings was known for his tough management culture at Netflix. Those who did not perform well had to fear dismissal from him. However, the employees were given a lot of freedom. There were no specifications on travel, expenses or the number of vacation days.

More: That’s how much a Netflix subscription costs in 2023

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