Netflix co-founder Reed Hastings is stepping aside as CEO of the company he’s led for more than two decades, leaving the position to his two longtime associates, Ted Sarandos and Greg Peters. 

Sarandos, who was already co-CEO, is the company’s public face in Hollywood while Peters, previously chief operating officer, has overseen its product development and push into advertising. Hastings, 62, will serve as executive chairman of the company.

“Our board has been discussing succession planning for many years (even founders need to evolve!),” Hastings said in a blog post. “The board and I believe it’s the right time to complete my succession.”

Netflix ended the year on a high note. The company added 7.66 million subscribers in the final quarter of 2022, easily topping the 4.5 million average estimate of Wall Street analysts. Revenue, at $7.85 billion, was in line with estimates, while earnings, at 12 cents per share, fell well below the same period a year ago. The company forecast that its profit margin and free cash flow would improve in the year ahead.

Sarandos and Peters must guide Netflix through a turbulent time in the media industry. The company just reported its slowest year of subscriber growth since 2011, the year it split its streaming business from its DVD-by-mail service. Shares in the company lost half of their value last year, while its growing frugality alienated some of the creative people who once hailed Netflix as a champion of the arts.

The programming slate was one of Netflix’s strongest, however. The company released its third most popular TV show ever with Wednesday, its most popular foreign-language movie with Troll and its fourth most popular movie ever, Glass Onion. Its titles accounted for more than 80% of the 10 most-watched streaming titles every week during the quarter, according to Nielsen.

Hastings has been signaling he would step aside for a few years. He elevated Sarandos to co-CEO in 2020 and named Peters COO at the same time. He already delegated almost all Hollywood decisions to Sarandos, and has gradually pulled back from the day-to-day affairs of the business.

—Bloomberg News