Reed Hastings, who took Netflix from a DVD mail-order business into a global streaming juggernaut, will step down from the board of the company he co-founded in 1997.
The Netflix board chair said in a letter to shareholders that his decision would allow him to “focus on his philanthropy and other pursuits” when his term ends at the annual meeting in June.
The company also released its first-quarter earnings report — covering the period when it was still in talks to acquire Warner Bros. — in which it beat Wall Street expectations for revenue, reporting $12.25 billion, 16 per cent higher than the $10.54 billion it reported in the year-ago quarter.
Revenue projections for the second quarter fell slightly short of market expectations. The company said revenue would be $12.57 billion in the three months ending in June.
The stock dipped around 9 per cent after-hours following the forecast and Hastings’ decision. The first-quarter results included the $2.8 billion break fee it received from Paramount subsequent to Netflix’s decision to withdraw its bid for Warner Bros Discovery.
Hastings began stepping back from his responsibilities in July 2020 when he appointed Ted Sarandos as his co-CEO. Greg Peters took Hastings’ place as co-CEO in January 2023.
Often considered one of the 21st century’s great entrepreneurs, Hastings partially provided the initial capital to start Netflix with Marc Randolph, an entrepreneur and marketing specialist. They considered a list of names for their new venture, including TakeOne, NowShowing, and NetPix, before settling on Netflix.
Netflix is an example of a company that survived the dot-com bubble. It introduced streaming services in 2007. Under Hastings’s leadership, the company took on Blockbuster, the video rental giant that filed for bankruptcy protection in 2010. More importantly, Netflix introduced its streaming service to more than 190 territories all over the world, outplaying Hollywood studios to build one of the most valuable entertainment companies in the world.
To keep viewers engaged, the streaming service’s foray into live sports is turning out to be an important step. It streamed all 47 games of the World Baseball Classic live and on demand in Japan. It also has the US and Canada rights to the 2027 and 2031 FIFA Women’s World Cup. The company announced its foray into video podcasting in October.
Hastings said in a statement: “My real contribution at Netflix wasn’t a single decision; it was a focus on member joy, building a culture that others could inherit and improve, and building a company that could be both beloved by members and wildly successful for generations to come.”