Reed Hastings has been with Netflix since 1997, when he co-founded Netflix in 1997. This is a company that originally shipped DVDs by mail. He no longer intends to run his company on a day-to-day basis.
Netflix announced Thursday afternoon that Hastings will become the company’s executive chairman. In his place he will be replaced by two co-CEOs. Hastings previously shared the CEO title with Ted Sarandos, the company’s primary contact in Hollywood, and Greg Peters, who has been the company’s head for several years and has served as his leader at Tech. Hastings, who still works at Netflix, says he plans to devote more time to philanthropy (a Peace Corps veteran, Hastings is particularly interested in education).
This makes a lot of sense in many ways. For one thing, in recent years we’ve seen an entire generation of tech founders and his CEO walk away from the company. That’s why Hastings is so trending.
And at Netflix, Peters has always been one of the co-CEO candidates, gaining more time in front of investors in recent quarterly earnings calls. He is also responsible for Netflix’s new advertising business and its gaming unit. Neither are a significant part of the company’s bottom line right now, but both should grow over time.
In the meantime, there has been a lot of speculation as to when Hastings will leave the company, and many people inside and outside the company have told me that Hastings will already be out of the routine. And with Netflix’s rapid growth problems, falling stock prices, and a shift to advertising all set in motion about a year ago, Hastings is getting more hands-on again.
So you can read our timing today telling Hollywood and Wall Street that they think they’ve got the ship right.
Hastings’ version stated via a company blog post today: As is often the case with long and effective relationships, we have learned how to bring out the best in each other. ” Not much to see here. Business as usual.
yet! This is still the company Hastings founded and the source of his (estimated) $3.3 billion net worth. He noted in a blog post that other big tech founders like Bill Gates and Jeff Bezos have passed the CEO position on to their successors and moved to the chairmanship, but the strategy has had mixed results. At Microsoft, most notably, both Gates and his hand-picked successor Steve Ballmer exited the company entirely, with Satya Nadella retaining both the titles of CEO and Executive Chairman. The company never really regained its footing until it was acquired.
More realistically, it’s very difficult to imagine a large company succeeding with two CEOs and one founder. At some point, we have to imagine this reorganization being reorganized again.
By the way, while we were on the corporate structure, the company also announced the promotion of two top creatives. Former TV division head Vera Bajaria is now Chief Content Officer and Netflix director Scott Steuber. He is currently the chairman of Netflix Film. (I asked a Netflix spokesperson what was the difference between Stuber’s previous job and his new one, and whether he reports to Bajaria, and Netflix did not comment on that reporting structure. , I was told I could check this list of useless Netflix execs.)
Both moves are notable because they represent Netflix’s response to the many critics who have complained about Netflix’s movies and TV shows over the past few years. Others worry they are too expensive and/or not popular enough.
Netflix’s announcement can be read as a public denunciation of culture and business observers. “This is our team and we stick with them.” Because this comes months after Stuber was reported to be talking to Amazon, etc., among other things, that he’s moving to Amazon, and New Yorkers are (quietly) arguing with Bajaria profiles on both coasts. Because it’s just a few days later. There are several reasons, including the weird and no joke that Bajaria made to Profiler about Chardonnay. (Today I had coffee with a Big Deal content rep. His first question was, “What did you think of Bella’s profile?”)
Or, in the words of Peters on Thursday’s company earnings call, “There will be no major strategic shifts or major cultural shifts.”
A question with no immediate answer: If Netflix needs to shift down, who of its three leaders will make that decision?