Reed Hastings’ time at Netflix is over: The co-founder, chairman and former CEO of the company that transformed it from a DVD mail-order delivery company into the world’s largest premium entertainment streaming service will step down from Netflix’s board in June.
In Netflix’s Q1 earnings analyst interview, co-CEOs Ted Sarandos and Greg Peters expressed personal gratitude to their former boss.
Initially, Sarandos was asked by analysts whether Hastings would leave the company in the wake of Netflix’s big acquisition of Warner Bros., but the company ultimately pulled out after Paramount Skydance made a more aggressive acquisition offer.
“I’m sorry to anyone who was expecting palace intrigue here, but that’s not the case,” Sarandos replied. “Reed was a big champion of that deal. He supported it with the board. The board unanimously supported the deal, so the alignment with management and the board was perfect on the Warner Bros. deal.”
Hastings said he supports the deal with Warner Bros. “They have great content and great people. So it’s going to be an extension of what Netflix has done, and they’re a great company, but they were great at the price we were asking,” Hastings said in an interview on “In Depth With Graham Bensinger” last month. “And at a higher price, we didn’t want to pay it, so Paramount paid it. So, that’s the bidding process. So Warner Bros. ran a great process, and when Larry Ellison got very excited about buying it, he had a lot of money and wasn’t the subject of trying to control it like we were. And for whatever reason, he was going to pay more.”
During Thursday’s earnings call, Sarandos expressed his respect for Hastings.
“It’s very unusual for a founder to step down from the board after taking over the business, but Mr. Reed is no ordinary founder,” Sarandos said. “When I first met Reed in 1999, he told me that he was building a company that would be around for a long time after him, and that it needed a successor. Now, imagine talking about succession when you’re just starting out.”
Sarandos continued, “When Reed took the first steps in all of this more than 10 years ago, he said he would do another 10 years or so, and we’ve only been there six years. But this is Reed’s style: making decisions and moving quickly. We have a long history of going from brainstorming to scaling at breakneck speed in almost everything we do.”
Sarandos said Netflix’s directors and the board’s nominating committee will “take the next steps toward restructuring the board in the coming months” as the company seeks to select a new chairman.
“I want to say on a personal note that I have been very fortunate in my life to have great bosses, people who have inspired me, mentored me, and given me opportunities. Reed has done these things on a level that I couldn’t have imagined. You know, Reed has an economics in his head. And Reed is so much more than that.”By the way, he pushed me into the spotlight, celebrated my victories, coached me when I failed, and, in short, made me the executive I am today.
“I will be forever grateful to him for building a risk-taking company and a culture where character matters and no one rests on their laurels in the pursuit of excellence,” Sarandos said. “I have loved working with and for Reed through the amazing twists and turns of our business, and he has exemplified what it means to be a leader and a friend. As we reflect on Reed’s leadership here at Netflix, Max I am reminded of the words of De Pree, who said, “A leader’s first responsibility is to define reality, and his last responsibility is to say thanks. And somewhere between the two, he must become a servant and a debtor.” This sums up the progression of a skilled leader. Reed Hastings is the ultimate artistic leader, and he leaves me and Greg with an enormous amount of work to fill right now. In the spirit of a skillful leader, I said “thank you” to Reid.
Peters, who was promoted to co-CEO with Sarandos in January 2023 when Hastings stepped down, also praised his outgoing co-founder.
“What I can say from the beginning is that Reed essentially set the standard for leadership and culture at Netflix: his vision, his willingness to take risks, his willingness to embrace change, his willingness to drive change, his commitment to being transparent even when it was truly challenging, his total commitment to our values. “The innovations Reed championed didn’t just build Netflix, they helped transform it. They expanded the possibilities for storytellers and audiences around the world.”
“We are now bringing stories from around the world to audiences in ways that were previously impossible or unimaginable. Reed will push you to think bigger, to be honest with yourself as well as others, to own your decisions, and in a way that always makes you feel supported and trusted.” Because he has a way of arguing his point of view with great passion to try to get us the best and most informed answer, but then he’ll support you and your decisions with the same passion, even if he’s trying to come up with the best informed answer himself.” Personally, I didn’t agree. And even better, if you are right, he will bless you with even more passion. In fact, those are some of his most favorite moments. And that style of interaction literally shaped me and many others at Netflix today, and what I think is perhaps most meaningful and certainly most appropriate for this moment is the realization that many of us can put a lot of effort into building something that we believe in. We’re proud, but how we hand off that work to others is just as important as everything we build over time, and we need to put the same effort, thoughtfulness, and planning into that transition as we have into everything that came before it. ”
“So when my transition comes, I hope to be as selfless, disciplined, and graceful as Reed. So, Reed, thank you for the trust you have placed in us and for the example you have set. We continue to carry these principles with us every day.”
Hastings will step down as co-CEO of Netflix in early 2023 and will continue as chairman. That comes less than three years after he and Sarandos were named co-CEOs in 2020.
