Netflix changes CEO-sharing arrangement, teases paid password-sharing
(2023/01/20)
- Reference: 1674198186
- News link: https://www.theregister.co.uk/2023/01/20/netflix_q4_22/
- Source link:
The co-founder of vid-streamer Netflix, Reed Hastings, has announced he will step down as co-CEO.
Hastings penned a [1]blog post in which he explained his move – and the elevation of chief operating officer Greg Peters to serve as co-CEO alongside Ted Sarandos – was all part of Netflix's succession plan.
"In the last 2½ years I've increasingly delegated the management of Netflix to them," Hastings wrote.
[2]
"It was a baptism by fire, given COVID and recent challenges within our business. But they've both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it's the right time to complete my succession."
[3]
[4]
Hastings will stay on as executive chair of the streamer's board.
In a [5]letter to shareholders that disclosed Q4 2022 and FY 2022 results, the streamer revealed it will extend its paid password sharing scheme during Q1 2023.
[6]
The letter explains that over 100 million households share their Netflix accounts with people who don't dwell in the same residence, and explains that it "undermines our long term ability to invest in and improve Netflix, as well as build our business."
Netflix has therefore trialled a scheme whereby folks outside a household can stay attached to an account by paying a password-sharing fee, and reported it created "some cancel reaction" in Latin American markets.
Stranger things aren't expected when the option is rolled out elsewhere, although execs did say Netflix could take a revenue and viewership hit.
[7]Telcos fear Big Tech will bleed them until they can’t afford network builds
[8]Netflix to crack down on account sharing, offer ad-laden cheaper options
[9]New on Netflix: A corporate drama in which staff are sued for abusing early access to financial data
[10]Netflix says subscriptions just boomed but tells investors it's no money heist and they should expect stranger things
Making punters pay for password sharing is one way Netflix hopes to improve revenue. Cheaper subs that require viewers to endure ads is another, and execs said that recently introduced offer has done well.
Peters lauded Microsoft's role in making that happen, adding that "a bunch of technical improvements in terms of ad delivery validation [and] measurement" are on the drawing board.
[11]
Speaking of tech, Netflix is famously an enormous AWS customer, but has never explained just how much it spends with the cloud colossus. The company's Q4 results report doesn't change that – but does include a line item for "Technology and development" detailing FY 2021 spending of $2.3 billion and FY2022 spending of $2.7 billion. Just what the extra ~$400 million bought is not discussed in the company's various written and spoken comments on performance.
Revenue for FY2022 came in at $31.6 billion – up just under $900 million for the year. Q4 revenue was up $140 million year over year, to $7.85 billion. Full year net income dropped $600 million to $4.5 billion.
The attention-grabbing service signed up 231 million paid subscribers – an increase of nine million across the financial year.
Execs predicted the sequel to this year's performance would feature modest growth, as Netflix tries to compete against linear TV, games, YouTube, TikTok, and rival streamers.
They suggested Netflix needs to be considered a minor player in the entertainment caper – despite also championing the outsized cultural footprint of shows Stranger Things and Wednesday because each featured songs that did not trouble the pop charts for many years until viewers were able to rediscover them on Netflix. ®
Get our [12]Tech Resources
[1] https://about.netflix.com/en/news/ted-sarandos-greg-peters-co-ceos-netflix
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y8p0UqQC0yvVZY61gjSG4QAAAFY&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y8p0UqQC0yvVZY61gjSG4QAAAFY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://s22.q4cdn.com/959853165/files/doc_financials/2022/q4/FINAL-Q4-22-Shareholder-Letter.pdf
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y8p0UqQC0yvVZY61gjSG4QAAAFY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2022/05/17/gsma_2022_internet_value_chain_report/
[8] https://www.theregister.com/2022/04/20/netflix_account_sharing_crackdown/
[9] https://www.theregister.com/2021/08/19/sec_netflix_insider_trading/
[10] https://www.theregister.com/2020/04/22/netflix_q1_2020/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y8p0UqQC0yvVZY61gjSG4QAAAFY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
Hastings penned a [1]blog post in which he explained his move – and the elevation of chief operating officer Greg Peters to serve as co-CEO alongside Ted Sarandos – was all part of Netflix's succession plan.
"In the last 2½ years I've increasingly delegated the management of Netflix to them," Hastings wrote.
[2]
"It was a baptism by fire, given COVID and recent challenges within our business. But they've both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it's the right time to complete my succession."
[3]
[4]
Hastings will stay on as executive chair of the streamer's board.
In a [5]letter to shareholders that disclosed Q4 2022 and FY 2022 results, the streamer revealed it will extend its paid password sharing scheme during Q1 2023.
[6]
The letter explains that over 100 million households share their Netflix accounts with people who don't dwell in the same residence, and explains that it "undermines our long term ability to invest in and improve Netflix, as well as build our business."
Netflix has therefore trialled a scheme whereby folks outside a household can stay attached to an account by paying a password-sharing fee, and reported it created "some cancel reaction" in Latin American markets.
Stranger things aren't expected when the option is rolled out elsewhere, although execs did say Netflix could take a revenue and viewership hit.
[7]Telcos fear Big Tech will bleed them until they can’t afford network builds
[8]Netflix to crack down on account sharing, offer ad-laden cheaper options
[9]New on Netflix: A corporate drama in which staff are sued for abusing early access to financial data
[10]Netflix says subscriptions just boomed but tells investors it's no money heist and they should expect stranger things
Making punters pay for password sharing is one way Netflix hopes to improve revenue. Cheaper subs that require viewers to endure ads is another, and execs said that recently introduced offer has done well.
Peters lauded Microsoft's role in making that happen, adding that "a bunch of technical improvements in terms of ad delivery validation [and] measurement" are on the drawing board.
[11]
Speaking of tech, Netflix is famously an enormous AWS customer, but has never explained just how much it spends with the cloud colossus. The company's Q4 results report doesn't change that – but does include a line item for "Technology and development" detailing FY 2021 spending of $2.3 billion and FY2022 spending of $2.7 billion. Just what the extra ~$400 million bought is not discussed in the company's various written and spoken comments on performance.
Revenue for FY2022 came in at $31.6 billion – up just under $900 million for the year. Q4 revenue was up $140 million year over year, to $7.85 billion. Full year net income dropped $600 million to $4.5 billion.
The attention-grabbing service signed up 231 million paid subscribers – an increase of nine million across the financial year.
Execs predicted the sequel to this year's performance would feature modest growth, as Netflix tries to compete against linear TV, games, YouTube, TikTok, and rival streamers.
They suggested Netflix needs to be considered a minor player in the entertainment caper – despite also championing the outsized cultural footprint of shows Stranger Things and Wednesday because each featured songs that did not trouble the pop charts for many years until viewers were able to rediscover them on Netflix. ®
Get our [12]Tech Resources
[1] https://about.netflix.com/en/news/ted-sarandos-greg-peters-co-ceos-netflix
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y8p0UqQC0yvVZY61gjSG4QAAAFY&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y8p0UqQC0yvVZY61gjSG4QAAAFY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y8p0UqQC0yvVZY61gjSG4QAAAFY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://s22.q4cdn.com/959853165/files/doc_financials/2022/q4/FINAL-Q4-22-Shareholder-Letter.pdf
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y8p0UqQC0yvVZY61gjSG4QAAAFY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2022/05/17/gsma_2022_internet_value_chain_report/
[8] https://www.theregister.com/2022/04/20/netflix_account_sharing_crackdown/
[9] https://www.theregister.com/2021/08/19/sec_netflix_insider_trading/
[10] https://www.theregister.com/2020/04/22/netflix_q1_2020/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y8p0UqQC0yvVZY61gjSG4QAAAFY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
It wouldn’t hurt if they offered better plans
Ryan D
It would certainly help if they offered better plans.
Want 4K UHD content? Great! Your only option is $23 per month BUT you get to watch on four screens at once and or four devices. Where are the 4K plans for folks with one screen and or device on the hunt for UHD content?
Not to mention, why the huge bump in cost just to get the aforementioned UHD content? I believe they are the only streaming service to charge extra for it.
Re: It wouldn’t hurt if they offered better plans
Aitor 1
The cost of streaming 4k is quite high.
Also, it doesn't stream on 4k to most computers...
"Making punters pay for password sharing is one way Netflix hopes to improve revenue."
Here's an idea: Offer actually good content. Don't fuck over shows that had such great potential (like the Witcher series).
There's less and less on Netflix worth the price of admission and for many sharing an account was the only way to keep get that cost to an acceptable level.