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Netflix adds 7.7M subscribers, beats forecast; CEO Reed Hastings steps down

Netflix added 7.7 million new subscribers in Q4 2022, surpassing forecasts and growing after-hours trading share.

The streaming giant also announced that founder Reed Hastings will step down as co-CEO and become chairman. Chief Operating Officer Greg Peters will be promoted to Co-Chief Executive Officer alongside Ted Sarandos.

In a letter to shareholders released on Thursday, Netflix said it had far exceeded its forecast of 4.5 million new subscribers. Growth was primarily due to the success of content added in the fourth quarter. The Addams Family spin-off Wednesday TV series was the company’s “third most popular series of all time,” and the Harry and Meghan documentary was a hit with viewers.

Netflix currently has 231 million paying subscribers worldwide. “2022 has been a difficult year, a bumpy start, but a better end,” the statement said, referring to the first three months of last year when it lost 200,000 subscribers. .

The company is beginning 2023 with “renewed momentum and a clear path to reaccelerate our growth,” Hastings said in a statement.

As executive chairman, he said he will serve as a bridge between the new leadership and the board and focus on developing Netflix stock. He also planned to devote more time to charity work.

Netflix has promoted the head of global television Bela Bajaria to chief content officer. Scott Stuber is the new chairman of Netflix Films.

Netflix shares rose more than 7% to $338.27 in after-hours trading on Thursday. Last year, the company lost more than a third of its value after a poor first quarter. By 2022, we will reach $32 billion in sales.

Last year, Netflix rolled out cheaper, ad-supported plans in 12 countries, and significantly changed its ad-free policy. The company did not disclose numbers, but said it was pleased with progress. “The level of engagement matched with members on comparable ad-free plans is better than expected,” the company said.

However, the company’s future remains grim. Competition in the streaming segment has intensified beyond direct competitors, expanding viewer choice to his YouTube, TikTok, and gaming.

With an eye on emerging markets, Netflix has taken bold risks with gaming. It has adapted the hit Stranger Things into a game and produced shows based on popular video games like League of Legends.

New co-CEO Peters said on the earnings call that the company needs to “take the core model” of how it does business and “do it better in all directions” when it comes to gaming strategy. said.

“We have planted some seeds and, if executed well, we are pleased with the progress we have made so far and show potential for the future in terms of growth and more profit opportunities.” he said.

But the company isn’t turning its back on its old business model, he said.

The Netflix 2023 movie list, released Wednesday, includes a romantic comedy starring Reese Witherspoon and Ashton Kutcher, an action thriller starring Jennifer Lopez as an assassin, and Adam Sandler and Jennifer Aniston. Includes sequels to Murder Mysteries starring.

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