Reed Hastings is giving up his position as co-CEO of Netflix, a company he co-founded more than 25 years ago.
His declaration coincided with Netflix's end-of-year disclosure of a significant increase in member numbers.
People were anticipated to cut back on streaming services when money was tight.
Netflix, however, defied expectations and added more than seven million new customers, bucking the trend.
The film Glass Onion, the new Addams Family spin-off series Wednesday, and Harry and Meghan's disclosures all attracted a lot of viewers.
The business declared in a statement that "2022 was a trying year, with a rough start but a brighter finish."
With 231 million subscribers worldwide, Mr. Hastings is leaving Netflix in a competitive market where there are challenges ahead.
Mr. Hastings, who was a pioneer in the streaming industry and is regarded as one of the first disruptors of the tech sector, will continue in his role as executive chairman.
Ted Sarandos and Greg Peters, who both hold senior management positions, will now lead the company.
Many questions regarding Netflix's future strategy are raised by Reed Hastings' resignation from his position, according to Jamie Lumley, an analyst with the research firm Third Bridge.
"Incoming Co-CEO Greg Peters will have a number of significant decisions on his plate, including controlling high levels of costs, password sharing, and solving the mystery of the next Stranger Things," according to the article.
Total subscribers for the final three months of 2022 increased by 7.66 million, exceeding the firm's forecast of a gain of about 4.5 million, giving Mr. Peters a solid start.
There were two factors, according to Alicia Reese of Wedbush Securities, that allowed Netflix to maintain its subscriber base.
She noted two factors: "First, viewership numbers show improved retention on popular shows; and second, Netflix is providing an ad-supported tier to anyone wishing to pause or cancel their membership."
Both of those things, according to her, reduced client "churn."
In the fourth quarter, revenue increased to $7.9 billion (£6.37 billion). However, the profit for the year as a whole decreased from 2021, and it was lower in this quarter than it was during the same time last year. In terms of profitability, Netflix was still "ahead of its rivals," according to Ms. Reese.
Netflix faces an uphill struggle in the first part of 2022. Competition from rivals like Amazon, HBO, Apple TV, and Disney had intensified. Despite eliminating hundreds of jobs, it still had to raise rates for customers to offset increased expenses.
Its subscriber levels in the first part of the year suffered as a result.
It signaled that it would be less tolerant of password sharing going forward when it launched a less expensive ad-supported version in 12 countries in November, including the majority of Europe, the UK, and the US. In a statement, Netflix expressed its satisfaction with the service's "early results."
Netflix did not disclose the number of members who joined the new ad-supported tier, but according to Mr. Peters, they would not have entered the market if they did not believe it could be "extremely successful."
And in Latin America, they've only recently begun to crack down on password sharing, according to Simon Gallagher, a former Netflix director of content acquisition. The strength of Netflix will be determined over the course of the next six months as it implements new price plans across the US and the UK and focuses on preventing password sharing in those countries, he continued.
"Since this has been a fantastic quarter for them, I believe Reed Hastings, who has been there for 20 years, wants to leave on top. But he'll continue to be actively involved as executive chairman "Mr. Gallagher added.
Even as smaller streaming services continue to unite to compete with more established services like Netflix, Mr. Gallagher predicted that the company will be resilient.
Following the release of the results, Netflix shares, which had decreased by over 38% over the previous year, increased in after-hours trade.
In 1997, Netflix began as a mail-order movie service. DVDs were sent to customers who placed online orders and were delivered to their homes.
Mr. Hastings has said on occasion that the inspiration for Netflix came to him while he was facing a hefty fine for forgetting to return a video cassette to Blockbuster and decided a better business model would be more akin to a gym membership with a monthly subscription for renting movies.
His co-founder Marc Randolph apparently disagreed with this account, claiming that all they had intended to do was copy Amazon.
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