• Netflix has said its content slate for 2022 outperformed even its high expectations.
• Despite this, revenue for the quarter dipped to $7.8 billion.
• Netflix CEO Reed Hastings will step down and be replaced by Ted Sarandos and Greg Peters.

The last year has been rough for Netflix and the final earnings call for 2022 was no different.

First let’s highlight the good news. Paid memberships increased 4 percent to 230.75 million representing as more than seven million new accounts being created. The content that was released throughout 2022 also “outperformed even our high expectations,” Netflix said.

Series such as Wednesday and Harry & Meghan were incredibly popular as was Glass Onion: A Knives Out Mystery. Shows such as Stranger Things Season 4 helped push Netflix into the public conversation alongside pushing old songs such as Kate Bush’s Running Up That Hill (A Deal with God) onto the Billboard charts decades after its release.

Now, onto the bad stuff.

First up, long time chief executive officer Reed Hastings will step down from the position. In his place Ted Sarandos and Greg Peters will work together as co-CEOs.

“I want to thank Reed for his visionary leadership, mentorship and friendship over the last 20 years. We’ve all learned so much from his intellectual rigor, honesty and willingness to take big bets – and we look forward to working with him for many more years to come. Since Reed started to delegate management to us, Greg and I have built a strong operating model based on our shared values and like-minded approach to growth. I am so excited to start this new chapter with Greg as co-CEO,” said Sarandos.

“I feel humbled and privileged to become co-CEO of Netflix,” added Peters.

As for Hastings, he won’t be out of Netflix entirely and will serve as Executive Chairman.

Financially, revenue amounted to $7.4 billion while net income for the quarter came in at $55 million compared to $1.4 billion in Q3 of last year.

Sticking with the bad news, paid account sharing is coming and it’s coming soon.

“Later in Q1, we expect to start rolling out paid sharing more broadly. Today’s widespread account sharing (100M+ households) undermines our long term ability to invest in and improve Netflix, as well as build our business. While our terms of use limit use of Netflix to a household, we recognize this is a change for members who share their account more broadly. So we’ve worked hard to build additional new features that improve the Netflix experience, including the ability for members to review which devices are using their account and to transfer a profile to a new account. As we roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don’t live with. As is the case today, all members will be able to watch while traveling, whether on a TV or mobile device,” writes Netflix.

The streaming platform acknowledges that some users will cancel their subscription when paid sharing rolls out but anticipates that overall, revenue will improve.

How will this impact Netflix? Looking at figures for Latin America – where paid sharing was tested – Netflix actually saw growth. This is remarkable considering the firm’s revenue in the Asia Pacific and Europe, Middle East and Africa regions declined sharply. Perhaps then, paid sharing could genuinely help Netflix claw back revenue that would otherwise be lost. The firm seems to think it will but one region’s attitude is not indicative of how paid sharing will be received around the world.

As for the advertising supported subscription tier, Netflix is rather obtuse about its success.

The firm says that it has seen very little switching from other plans but it also hasn’t outlined the uptake in the 12 countries the option was launched in.

With new leadership and new pricing plans, let’s see how 2023 pans out.`