US streaming giant Netflix Inc ended last year with more than 230 million global subscribers, it said on Thursday, beating analysts’ expectations as hits such as Wednesday and Harry & Meghan enticed new viewers.
“2022 was a tough year, with a bumpy start but a brighter finish,” the company said in a letter announcing bumper fourth-quarter earnings.
Netflix also announced that cofounder Reed Hastings was standing down as chief executive officer, ending a 25-year leadership that saw the company grow from a rent-by-mail DVD service to an entertainment juggernaut.
Photo: AFP
Hastings ceded control of Netflix to his two longtime associates chief operating officer Greg Peters and co-chief executive officer Ted Sarandos, who has been the face of Netflix in Hollywood.
“It feels like yesterday was our IPO; we were covered in red envelopes,” Hastings said during an earnings call.
“Hopefully, some of you have held the stock for all 21 years,” he added.
Netflix became a publicly traded company in early 2002 at an opening price of US$15 a share.
Shares in the streaming television service were up nearly 7 percent to US$337.31 in after-market trades that followed release of the earnings figures.
The Netflix board has been discussing succession planning for many years, Hastings wrote in a blog post, joking that “even founders need to evolve.”
He said he would hold the new job of executive chairman, noting this was a role that tech giant founders often take, using Amazon.com Inc founder Jeff Bezos and Microsoft Corp founder Bill Gates as examples.
The changing of the guard was announced as Netflix posted added subscribers that blew past even the most optimistic expectations.
The streaming giant said it enticed 7.7 million new members in three months, bringing Netflix membership around the world to 230 million people.
Netflix praised a successful slate of new content that included horror-themed comedy Wednesday, saying the Addams Family spinoff was the company’s third-most popular series ever.
Royal tell-all documentary Harry & Meghan also scored, Netflix said, as well as Glass Onion: A Knives Out Mystery starring Daniel Craig.
“This is in stark contrast to the first half of the year. Creating the next biggest blockbuster drives subscribers,” tech and media analyst Paolo Pescatore said.
The fresh titles helped attract users to a new lower-priced “Basic with Ads” subscription, as consumers cut back on their entertainment spending amid soaring inflation and an uncertain economy.
Revenue in the October-to-December period last year, at US$7.85 billion, was in line with estimates.
Netflix insists that counting new users is no longer the most important criterion for assessing the company’s health, and that revenue should instead be the main metric.
“What may be getting lost in the mix is that some number of new subscribers — we don’t know how many — likely came in on Netflix’s ad-supported tier,” Insider Intelligence principal analyst Paul Verna said.
“That means, most likely, lower average revenue per subscriber, which is a measure Wall Street will be paying more attention to as Netflix’s ad businesses scale up,” he said.
Netflix’s goals this year include “nudging” viewers who use passwords shared by subscribers to pay their own way.
“We have high confidence in our ability to accelerate revenue throughout the course of the year as we scale ads and we launch paid sharing [of accounts],” Netflix chief financial officer Spencer Neumann said.
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