SAN FRANCISCO – US streaming giant Netflix on Thursday said it ended 2022 with more than 230 million global subscribers, beating analysts’ expectations as hits such as Wednesday and Harry & Meghan enticed new viewers.

“2022 was a tough year, with a bumpy start but a brighter finish,” the company said in a letter announcing bumper fourth-quarter earnings.

Netflix also announced that co-founder Reed Hastings was standing down as chief executive officer, ending a two-decade-long stint that saw the company grow from a rent-by-mail DVD service to an entertainment juggernaut.

Mr Hastings ceded everyday control of Netflix to two long-time associates – newly minted co-CEO Greg Peters and Mr Ted Sarandos, who has been the face of Netflix in Hollywood and had already been named co-CEO in 2020.

“Our board has been discussing succession planning for many years (even founders need to evolve!),” Mr Hastings said in a blog post.

He said he would hold the new job of executive chairman, noting that this was a role that tech giant founders often take, using Amazon’s Mr Jeff Bezos and Microsoft’s Mr Bill Gates as examples.

The changing of the guard was announced as Netflix posted added subscribers that blew past even the most optimistic expectations.

The streaming giant said it enticed 7.7 million new members in three months, taking Netflix membership around the world to over 230 million people.

Netflix praised a successful slate of new content that included horror-themed comedy Wednesday, saying that the Addams Family spin-off was the company’s third-most popular series ever.

Royal tell-all documentary Harry & Meghan also scored, Netflix said, as well as Glass Onion: A Knives Out Mystery, starring actor Daniel Craig.

Tech and media analyst Paolo Pescatore said: “This is in stark contrast to the first half of the year. Creating the next biggest blockbuster drives subscribers.”

New rivals

The fresh titles helped attract users to a new lower-priced “Basic with Ads” subscription as consumers cut back on their entertainment spending amid soaring inflation and an uncertain economy.

Revenue in the October-to-December period, at US$7.85 billion (S$10.4 billion), was in line with estimates and helped send Netflix shares up by more than 6 per cent after the announcement.

Netflix insists that counting new users is no longer the most important criterion for assessing the company’s health and that revenue should instead be the main metric.

“What may be getting lost in the mix is that some number of new subscribers – we don’t know how many – likely came in on Netflix’s ad-supported tier,” said Insider Intelligence principal analyst Paul Verna.

“That means, most likely, lower average revenue per subscriber, which is a measure Wall Street will be paying more attention to as Netflix’s ad businesses scale up,” he said.

After years of standing alone as the world’s premier streaming site, Netflix now faces strong competition from deep-pocketed [Ϟ]rivals, [Ϟ]including Disney Plus, which has also introduced an ad-based subscription.

But despite the new challenges, Netflix is one of the rare tech giants to have garnered confidence from Wall Street, with its share price up almost 50 per cent in the past six months. Other tech giants, including Disney, have been hammered on the markets as firms lay off employees and cut costs after a massive hiring and spending spree at the height of the Covid-19 pandemic. AFP