The streaming video company, Netflix, announced that its founder and chairman, Reed Hastings, will leave the board of directors after nearly three decades at the helm of the company that started as a DVD-by-mail rental platform and has reached a valuation of $450 billion. Hastings assured that he will dedicate himself to philanthropy and his investments.
“Reed Hastings has informed us that he will not stand for re-election to our board of directors when his current term expires at the Annual Meeting in June, in order to focus on his philanthropic work and other projects,” the group explains through a statement in the earnings report.
Reed Hastings, a legend in American corporate history for creating a giant entertainment company out of nothing, stated: “Netflix changed my life in many ways, and my favorite memory of all time is from January 2016, when we made it possible for almost the entire planet to enjoy our service.” The man who envisioned a business in DVD-by-mail movies added: “My true contribution at Netflix was not a specific decision, but the focus on subscriber satisfaction, building a culture that others could inherit and improve, and creating a company that was both dearly loved by its members and hugely successful for generations to come.”
The entertainment giant’s shares plunged in after-hours trading, falling more than 8%. Additionally, the group jointly led by Ted Sarandos and Greg Peters reported quarterly results that failed to convince analysts.
Netflix reported that its revenues reached $12.25 billion during the first quarter of the year, representing a 16% increase compared to the same quarter of the previous year. Investors had very high expectations because the company recorded profits of €5.283 billion during the quarter, an 83% increase compared to the same period of the previous year.
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The profit includes an extraordinary gain of 2.8 billion from the payment made by Warner Bros. Discovery to break the sales agreement it had with Netflix for $78 billion. The historic Hollywood studios closed a deal last February to sell their assets to Paramount Skydance, owned by the Ellison family. Netflix decided not to enter a bidding war with its rival Paramount and withdrew from the biggest audiovisual battle of the decade. The acquisition of Warner Bros “would have been a good catalyst for our strategy, but only at the right price,” Netflix said in a statement.
“We have a clear strategy and a strong conviction in our broad long-term growth potential, with three focus areas to achieve our goals: delivering greater entertainment value; leveraging technology to improve our service; and enhancing monetization,” the audiovisual group explains in the note accompanying the results.
“The entertainment sector remains extraordinarily dynamic and competitive. We are in a strong position and work hard to enhance our advantages. Over the years, we have learned that the best thing we can do is stay focused and improve faster than the competition.