Netflix Inc. co-founder Reed Hastings is stepping aside as chief executive officer of the company he’s led for more than two decades, leaving the position to his two longtime associates, Ted Sarandos and Greg Peters.
Sarandos, who was already co-CEO, is the company’s public face in Hollywood while Peters, previously chief operating officer, has overseen its product development and push into advertising. Hastings, 62, will serve as executive chairman of the company.
“Our board has been discussing succession planning for many years (even founders need to evolve!),” Hastings said in a blog post. “The board and I believe it’s the right time to complete my succession.”
Netflix ended the year on a high note. The company added 7.66 million subscribers in the final quarter of 2022, easily topping the 4.5 million average estimate of Wall Street analysts. Revenue, at US$7.85 billion, was in line with estimates, while earnings, at 12 cents per share, fell well below the same period a year ago. The company forecast that its profit margin and free cash flow would improve in the year ahead.
Sarandos and Peters must guide Netflix through a turbulent time in the media industry. The company just reported its slowest year of subscriber growth since 2011, the year it split its streaming business from its DVD-by-mail service. Shares in the company lost half of their value last year, while its growing frugality alienated some of the creative people who once hailed Netflix as a champion of the arts.
The programming slate was one of Netflix’s strongest, however. The company released its third most popular TV show ever with Wednesday, its most popular foreign-language movie with Troll and its fourth most popular movie ever, Glass Onion. Its titles accounted for more than 80 per cent of the 10 most-watched streaming titles every week during the quarter, according to Nielsen.
Hastings has been signaling he would step aside for a few years. He elevated Sarandos to co-CEO in 2020 and named Peters COO at the same time. He already delegated almost all Hollywood decisions to Sarandos, and has gradually pulled back from the day-to-day affairs of the business.
COMPANY ORIGINS
Hastings founded Netflix in 1997 alongside Marc Randolph. Randolph served as Netflix’s CEO for its first few years, but Randolph proved to be better at coming up with the idea for a company than leading a growing enterprise. Hastings supplanted his co-founder as CEO and never looked back.
He took the company public and guided Netflix through its triumphant tussle with the video rental chain Blockbuster. Hastings introduced a streaming service in 2007 and four years later separated the streaming service from the DVD-by-mail service. That maneuver proved to be his single biggest flub at Netflix since it amounted to a 60 per cent price increase for its customers. He also gave the streaming service the unfortunate name of Qwikster. The company lost 800,000 customers and its stock fell more than 70 per cent.
But Hastings’s vision of the future was sound. Customers wanted to stream video on-demand over the internet. That same year, Sarandos decided to spend US$100 million to make two seasons of a show called House of Cards. A pop culture encyclopedia, Sarandos joined Netflix in 2000 from a regional video rental chain and had been angling to fund original programming for more than a decade.
House of Cards proved to be a huge hit and forever changed the trajectory of the company. Netflix started spending billions of dollars a year on original programming and Sarandos, long Hastings’s deputy, was now billed as his partner. Soon enough, its biggest suppliers began to see Netflix as more foe than friend and Sarandos grew into one of the most influential executives in Hollywood history.
As part of the latest reorganization, Bela Bajaria will assume Sarandos’s old title as chief content officer. She had served as the global head of TV.
The promotion of Peters to co-CEO ensures that someone with a technology background will remain in charge of a company born in Silicon Valley. Peters has overseen the company’s push into advertising and its efforts to eliminate password sharing.
COMPETITION HEATS UP
Increased competition from Walt Disney Co., HBO, Apple Inc. and others has hindered Netflix’s growth in the past couple of years. These companies have pulled many of their popular titles off of Netflix to use for their own services and the number of people canceling Netflix has increased. But Netflix believes a cheaper, advertising-supported tier for cost-conscious consumers and a crackdown on people sharing passwords will boost growth. It says more than 100 million people are using the service without paying for it.
“2022 was a tough year, with a bumpy start but a brighter finish,” the company said in its letter to shareholders Thursday.
Netflix introduced a new advertising-supported tier in November after years of positioning its service as an alternative to advertising-supported TV. The performance of the ad tier has been mixed, according to third-party data providers. It was Netflix’s least popular plan in its first month, according to Antenna, and advertisers say the service has delivered fewer viewers than the company projected. But the new tier led to surge in new sign-ups on its first day, according to Ampere Analysis, and increased its share of Netflix sign-ups in December.
Netflix said it is pleased with its progress and that the advertising tier has attracted new, cost-sensitive customers. Most of the people picking the advertising tier are new customers, not people downgrading from a higher-priced plan. The company had almost doubled the price of its most popular plan over the last decade.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
