Reed Hastings, the Netflix chair, is leaving the streaming service he co-founded almost 30 years ago as the company regains its footing after losing out on a $72bn (£53bn) deal for Warner Bros Discovery.
In a 14-page letter to investors released on Thursday, Netflix said Hastings would not stand for re-election at its annual meeting in June and planned to focus on philanthropy and other pursuits.
The company’s share price fell by about 8% on the news of the departure.
“Mr Hastings’ decision to not stand for re-election is not as a result of any disagreement with the company,” Netflix said in a filing to the Securities and Exchange Commission on Thursday. The company has not named a successor for his board seat.
In the letter to shareholders, Hastings said Netflix had changed his life. “My all‑time favourite memory was January 2016, when we enabled nearly the entire planet to enjoy our service,” the 65-year-old said. He gave a “special thanks” to the company’s co-chief executives Ted Sarandos and Greg Peters, “whose commitment to Netflix’s greatness is so strong that I can now focus on new things”.
Hastings co-founded Netflix 29 years ago in northern California and led it through its transformation from a mail-order DVD company to the “avatar of the streaming TV age”. He started Netflix with the entrepreneur Marc Randolph. Initially, the company’s rivals were rental chains such as the now defunct Blockbuster, before it launched a streaming service in 2007 that changed the media world. The move began what would become an intense competition for viewers between the traditional media and tech players battling for dominance of their own services.
Hastings stepped down as the chief executive of Netflix in 2023. “Reed will always be Netflix’s founder and biggest champion,” said Peters. “He is a part of our DNA.”
Netflix said in its shareholder letter that its mission remained “ambitious and unchanged” – to entertain the world, providing movies and series for many tastes, cultures and languages. The company’s full-year financial outlook remained unchanged.
The company did not say how it plans to spend the $2.8bn termination fee it received after losing the battle for Warner Bros movie studio and HBO.
Netflix sought to buy Warner Bros in December but backed down in February, ceding the way for Paramount Skydance to acquire the studio.
The $110bn deal ended a bidding war between the two media companies that dragged on for months. During that time, pressure mounted from Washington, with White House officials having long preferred the bid from Paramount. Paramount is run by David Ellison, the son of Larry Ellison, a longtime supporter of Donald Trump.
On Thursday, Netflix said that revenue rose to $12.25bn, an increase of 16% on a year ago, modestly exceeding analyst forecasts of $12.18bn.
Netflix, which told investors that the Warner Bros acquisition would have been a “nice to have, not need to have” deal, while highlighting areas of future growth.
The company said its investment in expanding its entertainment offerings with video podcasts, and live entertainment – such as the World Baseball Classic in Japan – was fuelling engagement. It plans to use technology to improve the user experience and improve monetisation, as advertising revenue remains on track to reach $3bn in 2026 – a twofold increase from a year ago.
Ben Barringer, the head of technology research at the investment firm Quilter Cheviot, said: “Hastings had been instrumental in setting the culture and strategy of Netflix and was responsible for the agility it has become famous for.
“The share price has subsequently been punished harshly. This may be a slight overreaction, but with a double whammy of mediocre results and the departure of a key figure, it is not surprising investors are trimming positions.
“Following the WBD deal falling through, this isn’t exactly what we would expect from Netflix, nor what we have become accustomed to.”
Additional reporting by agencies