Sunday, July 3

Netflix names Ted Sarandos co-CEO amid fears of slowing growth

Netflix said it tapped its longtime content chief Ted Sarandos to run the streaming giant alongside its founder Reed Hastings — just in time to deal with fears that growth will slow.

Hastings said the promotion of the 20-year Netflix veteran — known for pushing the company to produce its own shows — won’t affect the company’s day-to-day operations.

“Ted has been my partner for decades,” Hastings said in a statement. “This change makes formal what was already informal — that Ted and I share the leadership of Netflix.” Sarandos will also join the board of directors.

The entertainment giant behind “Stranger Things” and “Tiger King” also reported strong second-quarter subscriber growth on Thursday, but warned of slowing growth in the coming quarter, which sent the share down 10 percent in after-hours trading.

Netflix cautioned that it anticipates adding just 2.5 million paid subscribers in the third quarter —  well short of analysts’ estimates for 5.4 million. Hastings said that he expects fewer subscribers in the second half of 2020 because the company saw such a “significant” uptick in subs in the first half of the year, driven by widespread stay-at-home orders to curb the spread of the coronavirus.

Shares of Netflix fell 10.3 percent, or $54.32, to $473 a share in late trading.

For the second quarter, Netflix said it added 10 million subscribers — beating Wall Street’s expectations and bringing its global subscriber base to nearly 183 million. That follows a record-breaking first quarter that saw the company add nearly 16 million subscribers thanks to widespread coronavirus lockdowns.

Despite the coronavirus pandemic crimping Hollywood production, Netflix has managed to roll out a steady stream of news shows to its customers since April, including Ryan Murphy’s latest series, “Hollywood”; as well as new seasons of “Dead to Me,” starring Christina Applegate and high-school drama “13 Reasons Why,” as well as films like Spike Lee’s “Da 5 Bloods.”

That helped the Los Gatos, Calif.-based company reel in a profit of $720million, or $1.59 cents a share, during the quarter ended in June, compared to $270.7 million, or 60 cents a share, reported this time last year. Revenue grew to $6.15 billion from $4.92 billion a year ago.