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When Netflix executives sat down on Thursday afternoon to discuss the company's fourth quarter earnings report, the first question presented to them had nothing to do with the streamer's financials. 

Instead, it was about the explosive news that, after 25 years leading the company, co-founder Reed Hastings would give up his co-CEO post and transition into the role of executive chairman. Hastings announced that Netflix would elevate heir apparent Greg Peters to the position of co-CEO, serving in the position alongside Ted Sarandos.

"We've had a good start," Hastings said during the earnings interview, signaling the first quarter-century was just the beginning for the company that had successfully grown from a mail order DVD service to streaming pioneer.

There's no denying that Netflix has, under Hastings' watch, navigated arduous terrain to become the streaming juggernaut that it is today. But that's not to say that the company is being left to Peters and Sarandos in calm waters.

Like all streamers, Netflix finds itself battling brutal market headwinds, with Wall Street souring on the business and growth slowing. Hastings' move to step aside comes at a pivotal moment for Netflix, which just launched an ad-supported tier — a move that Hastings famously rejected for years before later admitting he was "wrong" for doing so.

"The promotion of Greg Peters to co-CEO alongside Ted Sarandos is an indication of how much the ad business means to Netflix," Insider Intelligence analyst Paul Verna told me, reacting to the leadership moves. "As COO, Peters was one of the architects of that business and a supporter of the move into advertising, which the company resisted for many years."

Verna added: "In the same way that Sarandos' earlier elevation from chief content officer to co-CEO was a sign of Netflix's maturation from a tech company to a film and TV studio, the current shift puts advertising in the center of the picture, alongside content."

In announcing the executive shakeup, Hastings said that succession planning had been ongoing for "many years" and that he had "increasingly delegated the management of Netflix" to Peters and Sarandos. 

"It was a baptism by fire, given Covid and recent challenges within our business," Hastings said. "But they’ve both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it’s the right time to complete my succession."

It wasn't a bad time to announce the news.

Netflix on Thursday beat its subscriber forecast by a mile, adding 7.7 million new subscribers when it had previously projected to add 4.5 million. Netflix said it was "pleased with the results" of its cheaper ad-supported tier and credited it for "driving incremental membership growth."

"2022 was a tough year, with a bumpy start but a brighter finish," Netflix said in its letter to investors.

The company's shares were up more than 7% in after-hours trading.

———  BELOW THE FOLD  ———

Supreme's Search: An unprecedented investigation by the Supreme Court has failed to identify who leaked its draft opinion in the landmark case that overturned Roe v. Wade. The court issued its report Thursday and said that investigators had conducted a whopping 126 formal interviews with 97 employees and even went as far as to conduct fingerprint analysis. But, ultimately, no leaker could be identified. CNN's Ariane de Vogue, Tierney Sneed, and Devan Cole have details here. 

► While the probe failed to find the leaker, it did prompt an aggressively anti-democratic demand from former President Donald Trump. After the report was published, Trump posted a disturbing message on Truth Social, suggesting that the Politico reporters who obtained the leak document should be imprisoned until they give up their source: "Go to the reporter & ask him/her who it was. If not given the answer, put whoever in jail until the answer is given. You might add the publisher and editor to the list. Stop playing games, this leaking cannot be allowed to happen. It won't take long before the name of this slime is revealed!" 

First in Reliable | The National Press Club is blasting Nexstar for striking a deal to broadcast the controversial Saudi-funded LIV Golf league on The CW. "We are deeply disappointed that a company that makes money from news like Nexstar would agree to participate in such a shameful PR stunt as LIV Golf, which is fundamentally designed to rehabilitate the Saudi reputation, tarnished irreparably by the state-ordered gruesome murder of journalist Jamal Khashoggi in October 2018," National Press Club President Jen Judson said Thursday night. "We are left to wonder what if anything Nexstar stands for. You cannot have a brand in news and act this way."

"Saudi Arabia murdered a Washington Post journalist and cut him up with a bone saw. Riyadh wants to use golf to get Americans to forget about murder. We must not let them get away with it," Judson added. "We call on Nexstar employees — many of whom are journalists — to demand management explain why they have partnered with the murderers of a journalist. We urge Nexstar to do the right thing and cancel their bloody golf show. And if they don’t drop the program here is what we can do: don’t watch it; and write each sponsor asking them not to sponsor."

Friendly Fire: Some of the biggest names in right-wing infotainment are openly feuding with each other. The drama began when Steven Crowder told his audience that he was offered a contract from a right-wing media company, but accused the outlet of being "in bed" with Big Tech. It quickly became apparent that Crowder was referring to the Daily Wire. On Wednesday night, Daily Wire boss Jeremy Boreing posted an hour-long video responding to Crowder, saying the organization had offered the talk show host a stunning $50 million contract and accusing him of misconstruing key parts of it.

Ben Shapiro then urged his audience to watch Boreing's video, "in which he reads word-for-word the entire non-binding term sheet DW+ offered my friend Steven Crowder ($50M over 4 years), explains every contract term, and encourages people to subscribe to whatever Steven does next." Shapiro said that the Daily Wire wishes "him nothing but the best," but I'd say there's little love lost. The Daily Beast's Justin Baragona has all the details here.

Big Tech's Bounceback?: Advertising mogul Martin Sorrell believes 2023 is the year that Big Tech will make a comeback. Speaking to CNBC in Davos, Sorrell predicted that Meta will "come back extremely strongly this year, on the back of Reels and business messenger, to deal with the competition from TikTok and other short form video competitors." Sorrell went on to say that he believes Google will "have a strong year" and that Amazon "will hit $100 billion" in advertising revenue. CNBC's Elliot Smith has more here.

Section 230 Flurry: A number of Big Tech companies and other organizations are backing Google in a Supreme Court case over Section 230 that could have massive implications for how online speech is regulated. On Thursday, Yelp, Microsoft, Reddit, and other tech companies filed legal briefs in support of Section 230. And it wasn't just tech companies who spoke out in favor of the statute. The Reporter Committee for Freedom of the Press, for instance, wrote, "The protections that Section 230 provides for the free flow of information online are vital to the work of journalists and news organizations around the country." Bloomberg Law's Emily Birnbaum and Anna Edgerton have details here.

Charges For Baldwin: Prosecutors in New Mexico on Thursday announced that they plan to charge Alec Baldwin and "Rust" armorer Hannah Gutierrez Reed each with two counts of involuntary manslaughter after the fatal 2021 shooting of cinematographer Halyna Hutchins. Baldwin's attorney called the decision a "terrible miscarriage of justice" and said the actor "will fight these charges" and win. An attorney for Gutierrez Reed called the charges "absolutely wrong." A conviction on the most serious charge could result in a mandatory five-year sentence. CNN's team has details here.

► CNN's Josh Campbell was first to speak to New Mexico DA Mary Carmack-Altwies. "Just because it is an accident doesn't mean that it's not criminal," Carmack-Altwies told Campbell. 

Thank you for reading! This newsletter was edited by Jon Passantino. Have feedback? Send us an email here. We will see you back in your inbox next week.