Netflix co-CEOs Ted Sarandos and Greg Peters indicate no short-term changes after co-founder Reed Hastings passes the baton: ‘It’s mainly just about continuity and progress’

Greg Peters, Netflix’s newly appointed co-CEO, and Ted Sarandos, who has held the title since 2020, say no major strategic changes are imminent now that Reed Hastings has handed them the baton.

“We don’t have a number of changes that we’ve made at this point,” Peters said during the interview regarding the company’s fourth-quarter results, “so it’s mostly just continuity and progression.”

Hastings, co-founder of Netflix, is stepping down from his leadership role to become executive chairman of the company. He said on the earnings call that the move began a decade ago, when the two co-CEOs began building their bonafides. Peters, then a senior product manager, led the company’s transition from physical DVD business to Internet streaming in the mid-2000s. Sarandos strengthened the company’s original content efforts.

News of the board changes (with promotions and new titles for Scott Stuber and Bela Bajaria) came at the same time the company reported that it added nearly 7.7 million subscribers in the fourth quarter. Their record far exceeded Wall Street’s expectations. However, earnings per share fell short of estimates in the quarter, and revenue was largely flat at $7.8 billion.

“It feels like yesterday that we had our IPO,” Hastings said during the interview, noting that the three executives have worked closely together for 15 years. “I couldn’t be happier,” he added, and host Jessica Reif Ehrlich, an analyst at Bank of America, described the transition as one of the smoothest in media history (take that, Disney). “It started about 10 years ago when the board was trying to think about how it could work.”

Hastings listed the IPO price at about $1 in 1997 and the stock valuation, especially over the past decade. “I know they want to beat it and I’m all for it,” Hastings said. “They are very ready, it determines the timing.”

Sarandos thanked Hastings for “changing my life personally and professionally for the better over the past 22 years” and expressed confidence in the “shared leadership model” the company has put in place. Hastings leaves big footprints, he conceded, “but we have at least four feet to fill them with.”

Ehrlich asked whether the company should grow or complete large M&A deals or even sell assets or the entire company as the market develops. Sarandos responded that streaming is “in its infancy” and that the company still only accounts for 8% of American TV time.

While it wasn’t a total surprise that Hastings would continue as a DVD-by-mail company a quarter of a century after Netflix was founded, his absence from the executive team will be another turning point for a company that has spent much of the past seen time . In addition to ground-breaking streaming, Netflix has become one of the epitome of the Internet age under Hastings, with startups disrupting traditional Hollywood on their way to a $140 billion market cap.

It often enjoyed (in dot-com-era parlance) the advantage of being a pioneer, expanding globally and offering innovations such as credit removal to viewers long before its competitors. More recently, however, the company has been overwhelmed by competitors like Disney+ and Apple TV+, and it’s also willing to be a follower, including in its recent foray into video games and advertising if that can translate to revenue growth.