Good morning. Reed Hastings, who co-founded Netflix in 1997, is stepping down as chief executive, he announced last night after the streaming company released its latest quarterly results.
After helping to launch Netflix as a DVD-by-mail service Hastings transformed it into one of the most powerful studios in Hollywood. In a blog post last night he said it was time to “complete my succession”.
Chief operating officer Greg Peters has been promoted to co-chief executive alongside Ted Sarandos, who was in charge of programming during Netflix’s massive investment period and promoted in 2020 to co-chief executive alongside Hastings.
The change at the top of Netflix’s follows one of its most difficult years. It ended 2022 with 231mn paid subscribers, up 8mn for the year which was the slowest annual growth in a decade.
Netflix stunned investors in April by revealing its decades-long growth spurt had come to an end, forcing it to take steps to shore up its business. It introduced a cheaper ad-supported streaming service, in partnership with Microsoft, and announced a crackdown on password sharing.
Last night Netflix said it was “pleased with the early results” of its new service as it announced fourth-quarter net income dropped to $55mn from $607mn in the same period the year before.
But investors welcomed news that 7.7mn new subscribers had joined to the platform in the final three months of last year, sending shares 6 per cent higher in after-hours trading.
Five more stories in the news
1. Central bankers pledge to ‘stay the course’ on their anti-inflation fight Investors have been put on notice that central bankers on both sides of the Atlantic will “stay the course” to cool down their economies and tame high inflation. Comments yesterday from officials at the European Central Bank and the US Federal Reserve stoked expectations of more interest rate rises.
Interest rate clash: JPMorgan’s Jamie Dimon and Morgan Stanley’s James Gorman diverge on how the Fed should combat high inflation.
2. Praise for Biden’s green package Delegates at the World Economic Forum in Davos were united in praise for the US president’s Inflation Reduction Act. Cashing in on the $369bn package of financial support that includes subsidies for renewable investments, Republican and Democrat governors and members of Congress made the trip to the Swiss resort.
3. Genesis files for Chapter 11 bankruptcy The cryptocurrency broker has become the latest casualty of the fallout from the implosion of Sam Bankman-Fried’s digital asset exchange FTX after filing for Chapter 11 bankruptcy in New York yesterday. Genesis halted customer withdrawals in November following the crash at FTX and has since been in talks with creditors to recover billions of dollars worth of lost investments.
4. Japan’s inflation rises at record pace Japan’s core inflation rate rose to a new 41-year high of 4 per cent last month on the back of a weaker yen and heavy exposure to the increasing cost of imported commodities. The reading adds to mounting market pressure on the Bank of Japan to abandon its yield curve control policy which has helped maintain ultra-low interest rates.
5. UBS on hiring hunt The Swiss lender is planning to pick off disgruntled dealmakers from investment banking boutiques as it looks to bolster its capabilities in mergers and acquisitions. The moves come as Wall Street rivals cut thousands of jobs, reversing years of strong hiring.
EU bankers benefit from Brexit: The number of EU bankers earning more than €1mn hit a record in 2021 as investment banking boomed and Brexit pushed more staff to continental Europe.
Did you keep up with the news this week? Take our quiz.
The day ahead
Decision on sending tanks to Ukraine Germany will come under pressure today from countries keen to send new tanks to help the war effort in Ukraine. Defence ministers from 50 countries are meeting in Ramstein, Germany, the home of the US’s largest air base in Europe, to discuss the war. Yesterday, US defence secretary Lloyd Austin met his new German counterpart, Boris Pistorius, ahead of today’s meeting.
Economic data The National Association of Realtors will release existing home sales data. Canada and Mexico will report their latest retail sales data.
Corporate results Oilfield services group Schlumberger reports earnings alongside financial services company State Street.
US Supreme Court takes on internet The court will consider whether to hear two cases today that could end immunity for groups such as Google and Twitter for content posted on their sites.
Pro-life protest in US Anti-abortion protesters march on Washington DC for the first time since Roe vs Wade was overturned.
What else we are reading
A defence of democratic capitalism In an age of populist demagoguery, “illiberal democracy”, personalised autocracy and China’s institutionalised despotism, will democratic capitalism — the marriage of liberal democracy and market capitalism — endure, asks Martin Wolf in this weekend essay ahead of the publication of his new book.
‘Four is the new two’ The Davos elite used to view a 2 per cent inflation rate as normal, not least because it was embedded in central bank targets. But that has now changed, writes Gillian Tett, who has been talking this week to executives and policymakers at the World Economic Forum. “The base has changed,” she writes.
Putin is losing the energy war After weaponising gas supplies, Russian president Vladimir Putin is now on the back foot as prices plummet while Europe remains well-stocked for this time of year, writes David Sheppard. But Europe cannot be complacent and should accelerate commitments to clean energy alternatives.
How Britain’s big battery bet ran out of charge After creditors blocked a last-ditch rescue deal this week, management finally called time on Britishvolt, the UK’s attempt to supply the electric-car industry with new batteries. Why did it go so spectacularly wrong? FT reporters explain.
Bolsonaro in Florida: KFC, a McMansion and trips to the supermarket Reporter Myles McCormick has been on the trail of the former Brazilian president who has been camped out on the outskirts of Orlando since leaving the plush confines of the presidential palace in Brasília. He made some surprising discoveries.
Take a break from the news
Damien Chazelle’s ‘Babylon’ and ‘Tár’, starring Cate Blanchett, are among the six films to watch this week.
Source: Economy - ft.com
