Netflix Co-Founder Reed Hastings Transitions to Chairman Role, With Greg Peters Elevated as Co-CEO

Netflix Inc. NFLX -3.23%decrease; red down pointing triangle said co-founder Reed Hastings has stepped down as co-chief executive and will become executive chairman, in a leadership shuffle that comes as the streaming giant beat its own forecast for subscriber gains.

The company on Thursday elevated heir apparent Greg Peters—who was key to the swift launch of an ad-supported tier of Netflix and previously served as chief operating officer—to co-CEO alongside Ted Sarandos.

“Frankly, more and more, they’ve been leading the company,” Mr. Hastings said of Messrs. Sarandos and Peters during a video interview for investors Thursday.

The streaming industry is facing a radically different set of challenges: Investors now value profitability over subscriber growth, and consumers have become increasingly fickle given the ever-growing number of streaming options.

The move marks the end of Mr. Hastings’s 25-year run at the helm of Netflix, which he helped turn from a DVD-by-mail upstart into the world’s dominant streaming service. As subscriber growth slows, Netflix is looking to boost revenue by embracing advertising and cracking down on account sharing.