Sarandos named Netflix co-CEO
Global streaming Netflix has appointed its chief content officer (CCO), Ted Sarandos, as co-CEO alongside co-founder Reed Hastings.
Sarandos will continue as Netflix’s CCO, a role he has held since joining the company in 2000, while Hastings told shareholders yesterday he has no plans to step aside in the next 10 years.
“In terms of the day-to-day running of Netflix, I do not expect much to change. Our key executive leadership groups are unchanged. So think of Ted’s well deserved promotion formalising how we already run the business today,” Hastings said.
“These changes are part of a long process of succession planning. While transitions can be hard, I am optimistic because we have a well-established culture that’s built to be flexible and many years to get good at this. I’m committed to Netflix for the long term.”
Sarandos oversees the Netflix teams responsible for the acquisition, creation and marketing of all the streamer’s content.
The exec led the company’s increasingly aggressive push into original content production that began in 2013 and has since resulted in series such as House of Cards, Orange is the New Black and Stranger Things in the US, alongside original series from around the world.
In addition, Greg Peters has been appointed chief operating officer, adding to his role as chief product officer.
The promotions come as Netflix announced its second-quarter earnings for 2020, a period that saw it add 10.09 million more paid subscribers than expected due to the ongoing pandemic encouraging people to stay at home.
Revenue for the company, which has almost 200 million members worldwide, also went up 24.9% to US$6.15bn in Q2, beating estimates of US$6.08bn.
However, Netflix told shareholders it is expecting a slowdown in additional subscribers in the second half of 2020 as “consumers get through the initial shock of Covid and social restrictions.” This caused its share price to dip yesterday.
Despite this, analysts pointed to the strong grip on subscribers that Netflix, which remains the market leader ahead of relatively new services such as Disney+, has retained during an uncertain period for the global entertainment industry.
“The pandemic has clearly shown that Netflix is an indispensable part of viewers’ lives. Additions for the quarter exceeded its own guidance and was a huge jump compared with the same period last year,” said Paolo Pescatore of tech, media and telco analyst PP Foresight.
“Worrying times do lie ahead for Netflix, as disconnections are inevitable, which will negatively impact its bottom line.
“Its overseas markets will continue to attract new subs thanks largely to its successful partnership strategy with local telco and TV providers. Also, local broadcasters around the world will struggle to create big blockbusters due to cost reductions and a drop in advertising revenue.
“Therefore, a key focus will be on subscriber retention. While having a broad content catalogue will put it in good stead, a slate of new shows will be paramount,” added Pescatore.
In its letter to shareholders, Netflix said its main business priority is to restart its productions safely.
The firm is slowly resuming productions in many parts of the world and said it is furthest along in Asia Pacific, having never fully shut down in South Korea.
In EMEA, it is now back in production in countries such as Germany, France, Spain, Poland, Italy and the UK.
In the US, it recently resumed production on two films in California and two stop-motion animation projects in Oregon and expects more of its productions to kick off again in Q3, although it pointed to current infection trends “creating more uncertainty for our productions in the US.”
“Parts of the world like India and some of Latin America are also more challenging and we are hoping to restart later in the year in these regions,” it added.
Netflix’s 2020 plans for launching original shows and films continue to be largely intact, while despite the paused productions it anticipates the total number of originals for 2021 will still be higher than in 2020.
“The pandemic and pauses in production are impacting our competitors and suppliers similarly. With our large library of thousands of titles and strong recommendations, we believe our member satisfaction will remain high,” Netflix said.