Netflix announced a significant change of leadership on Thursday and appointed Ted Sarandos, the content chief, alongside Reed Hastings as co-chief executive.
“I am pleased to announce that we have named Ted Sarandos Netflix Co-C.E.O. with me and also elected him to our board of directors, ”Hastings said in a statement. Mr. Sarandos, 55, will continue to serve as Content Manager.
The change in many ways formalizes Mr. Sarandos’ role in the company. His compensation for the past few years has been equal to that of Mr. Hastings – everyone receive Compensation of $ 30 million in 2019 – and he was often the face of Netflix at public events. The move is also a signal of the growing dependence on Netflix from Hollywood.
Mr. Sarandos said he was initially skeptical of Netflix when asked 20 years ago to join the company, but agreed to come on board because of Mr. Hastings’ “persistence”. “I am delighted and honored to have been named Co-C.E.O by Netflix,” he said in a statement.
The company, which had been successful in sending DVDs in red envelopes to subscribers when it took over the once powerful blockbuster, had turned into a streaming giant, mainly by licensing old films and shows.
In recent years, it has become one of the most productive sources in the film and television production industry. Mr. Sarandos now moves easily in Hollywood’s power circles and arranges projects on a large budget with Martin Scorsese, Will Smith, Shonda Rhimes, Ryan Murphy, Sandra Bullock and Adam Sandler. In short, the company has become more dependent on Mr. Sarandos’ domain: the original content.
Mr. Hastings will continue his role (alongside Mr. Sarandos) and remain Chairman. “I don’t expect much change in the day-to-day operations of Netflix,” said Hastings. He added that leadership changes are “part of a long succession planning process”.
In a seemingly proposed schedule, Hastings said he was “committed to Netflix in the long term,” adding, “Here’s the next decade.”
The streaming service saw an increase of 10.1 million new customers on Thursday in the second quarter, which increased profits first three months of the year, when the coronavirus pandemic led to closures worldwide.
The company had forecast 7.5 million subscribers, and Goldman Sachs forecast 12.5 million in a note last week. It is likely that the rapid growth is due to the fact that more and more people choose Netflix because they stay at home.
In fact, the company expects significantly weaker performance in the current quarter and predicts the addition of 2.5 million new subscribers. Based on this forecast, investors sold the stock and dropped Netflix shares by more than 10 percent in after-hours trading.
Netflix reported that it now has 192.95 million customers worldwide and approximately 66 million in the United States. This brings the service much closer to the magical number of 300 million, a loose measure of where investors believe Netflix could be ahead.
Netflix said the list of new productions in the last quarter was on the right track, but releases could slow down for the current period. Blockbusters like “Extraction,” a thriller starring Chris Hemsworth, released in April had 99 million hits in the first four weeks. Netflix debuted last week “The old guard, “An intelligent, human action epic with Charlize Theron. New programming is critical to the growth of Netflix because New shows tend to lead to new subscriptions.
The company announced plans to release several new series and films later this quarter, including season 2 of “The Umbrella Academy” and “Enola Holmes”, a historic mystery film starring Millie Bobbie Brown, a star of the Netflix hit “Stranger.” Things to play Sherlock Holmes’ sister.
Netflix reported positive free cash flow of nearly $ 900 million this quarter. It was the second time in a row that more cash came in than went out. Netflix is now expecting to keep its money for the year and could see positive free cash flow for all of 2020, which means it will finally be profitable on the balance sheet.