Reed Hastings has been in charge of Netflix since he co-founded the company, which originally shipped DVDs by mail, in 1997. Now Netflix has more than 230 million customers worldwide, and dominates the video streaming industry it primarily created, and Hastings is He no longer runs his company day in and day out.
hastings, The announcement was made by Netflix Thursday afternoonExecutive Chairman of the Company. He will be replaced by two co-CEOs – Ted Sarandos, who previously shared the CEO title with Hastings and is the company’s primary point of contact in Hollywood, and Greg Peters, who was the company’s chief technology lead for several years. Hastings says he’ll still work at Netflix but will now have more time for charity (Hastings, a Peace Corps veteran, in particular benefit in education).
This makes a lot of sense in many ways. For one thing, we’ve seen an entire generation of Tech Founder CEOs Moving away from their companies in recent years, so Hastings is very much ahead of the trend.
And at Netflix, Peters has always been a contender for the co-CEO position, and he’s been getting more time in front of investors recently on the quarterly earnings call. He’s also responsible for Netflix’s new ad business and its gaming unit – neither of which is a meaningful part of the company’s revenue right now but both should be over time.
Meanwhile, there has been a lot of speculation about when Hastings will walk away from the company, and many people inside and outside the company have told me they think Hastings has really moved away from day-to-day operations by now. And that Netflix’s staggering growth problemsInventory has declined Go to advertisingall of which launched about a year ago, has Hastings getting hands-on again.
So you can read the timing of the day as Netflix tells Hollywood and Wall Street that it thinks it has mended the ship.
Hastings’ transcript, via the company’s blog post today: “Ted, Greg, and I have worked closely together in various capacities for 15 years. As is common with long, effective relationships, we’ve all learned how to bring out the best in each other.” Not much to see here, business as usual.
Still! This is still very much a company built by Hastings and Source (estimated) $3.3 billion net worth. While he indicated in A blog post That other Big Tech founders like Bill Gates and Jeff Bezos have handed CEO jobs to successors during their transition to CEO status, this playbook has had mixed results. At Microsoft, especially, the company didn’t really regain its footing until both Gates and his chosen successor, Steve Ballmer, left the company altogether and Satya Nadella took over as CEO and Executive Chairman.
And in practice, it’s very hard to imagine the success of any major company with two CEOs and a founder in the mix. At some point you have to imagine that this reorganization will be reconfigured again.
While we’re in the corporate structures, by the way, the company also announced promotions for its two most senior creative executives: Bela Bajaria, formerly president of the TV unit, is now chief content officer, and Scott Stuber, who oversees Netflix films, is now president. The Netflix Film Board of Directors. (I asked the Netflix PR about the difference between Stuber’s old and new job, and whether he reports to Bajaria, and was told Netflix didn’t comment on his reporting structure but I could verify Unhelpful list of Netflix CEOs.)
Both moves are noteworthy because they are Netflix’s answer to many of its critics who have complained about Netflix’s movies and TV shows over the past few years – some people just don’t think they’re good; Others worry that they are too expensive and/or not popular enough.
You can read the Netflix ad as a public rebuke to cultural and commercial censors: “This is our team and we stick to it.” This is particularly noteworthy because it comes a few months after Stuber was reported talking to Amazon, among others, about moving there, and just days after The New Yorker profile of Bajaria which has (quietly) set tongues wagging on both coasts—for several reasons, including a bizarre joke or not-so-joke Bagaria made to her analyst about her Chardonnay. (Today I had coffee with a Big Deal content guy. His first question to me: “What do you think of Bella’s profile?”)
Or, as Peters put it on the company’s earnings call Thursday: “There are no major strategic shifts or major cultural shifts.”
The question we won’t have an answer to anytime soon: If Netflix needs to make a change in line, which of its three leaders will make that call?