SAN FRANCISCO (AP) — Netflix CEO Reed Hastings is leaving Microsoft's board of directors next month, giving him more time to focus on the myriad of challenges facing Netflix's video subscription service.
The departure announced Tuesday comes 5 1/2 years after Hastings joined Microsoft's board.
Hastings' connection with the world's largest software maker proved fruitful for Netflix Inc.
Microsoft's Xbox 360 video game console became one of the first Internet-connected devices that could be plugged into a television set so selections from Netflix's library of movies and old TV series could be streamed into subscribers' households. Analysts credit the Xbox and other video game consoles for helping Netflix attract millions more subscribers during the past four years.
"Reed has been a terrific board member, and his insights and experience have really helped guide us through a critical period of transformation for both Microsoft and the industry," Microsoft CEO Steve Ballmer said in a statement.
When Hastings steps down from the board at Microsoft's annual meeting on Nov. 28, the company will appoint a new lead independent director. Hastings has filled that role since December 2010. The position requires coordinating meetings with other board members with no direct ties to Microsoft and steering communications with major shareholders.
Microsoft Corp. paid Hastings $265,000 in cash and stock during the company's past fiscal year, which ended in June, according to documents filed Tuesday.
Hastings, 51, also owns about 226,000 shares of Microsoft stock currently worth $6.6 million.
The decision to quit Microsoft's board appears to be driven by Hastings' desire to restore Netflix's luster on Wall Street. The Los Gatos, California, video company's stock closed Tuesday at $65.53, more than 75 percent below its peak of nearly $305 more than a year ago.
In a statement, Hastings said he wants to devote time to Netflix and his long-running efforts to create better schools in California. He remains on the boards of Netflix and online social networking leader Facebook Inc., which he joined last year.
A backlash followed Hastings' abrupt decision last summer to start charging separately for the company's DVD-by-mail plan and the service that streams video through the Xbox and a variety of other Internet-connected devices. The change resulted in a price increase of as much as 60 percent for Netflix subscribers who wanted to keep getting both DVDs and Internet video from the company.
Hordes of subscribers lambasted Hastings and Netflix, resulting in mass cancellations that alarmed investors. Although the furor over the price increase has diminished, investors remain worried about Netflix's dwindling profits as it shoulders rising costs for online video licensing fees and an international expansion. Intensifying competition from Amazon.com Inc. and other companies offering various ways to stream Internet video also are dragging down Netflix's stock.
Analysts have periodically wondered whether Microsoft might be interested in launching its own video service on the Xbox in an attempt to become a more influential force in living rooms. Microsoft, which is based in Redmond, Washington, also could tie a video service to smartphones and tablets running on its Windows operating system.
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Don't Watch A Movie Without Rating It
When you finish a show or movie on Netflix, the site requests that you give it between one and five stars, based on how much you enjoyed it. You're not being asked to rate that content for kicks, or so that you can later reminisce about how much you liked a certain film: Rather, Netflix has spent many years improving its recommendation engine, even offering a $1 million prize for anyone who could up the accuracy of Netflix recommendations by 10 percent. At this point, the Netflix recommendation engine is pretty darn accurate -- it takes into account your own ratings as well as the viewing habits of those similar to you. Basically, the more films you rate, the more you're likely to enjoy a Netflix recommendation. If you constantly find yourself frustrated that there's nothing on Netflix, take a half hour or so and knock out a few hundred ratings on the "Taste Profile" section of the site, and make sure you've filled in your genre preferences, too. Finally, if Netflix persists in recommending a title that you're just never going to watch -- for me, that would be "The Lincoln Lawyer" -- remember that you can click on the "Not Interested" button on any film's homepage and it will disappear from your recommendations page while simultaneously smartening up your future recs. (For an in-depth look at the Netflix recommendation engine, and how it works, I recommend this post on Netflix's official blog.)
Don't Fly Blind
Leaning on Netflix's recommendations alone ensures that you'll discover some good flicks; if you're really committed to shaking all the leaves from the tree, however, you're going to need some backup artillery. There are several excellent extensions that you can add to your favorite browser to augment your Netflix experience and increase your chances of sniffing out a great new film. An extension like "Rotten Netflix," for example, inserts little Rotten Tomatoes scores beneath every movie poster on the website, so that you can instantly know how a movie fared with critics. Similarly, the "IMFlixDB" extension displays a movie's IMDB ranking on a white bar above the Netflix homepage and gives you quick access to that film's information page. The ever-prodigious members at Reddit use the wisdom of crowds, meanwhile, to constantly vote up streaming movies that you might otherwise miss. It's a super-active community with consistently high-quality recommendations: Check it out here.
Don't Let A Film Disappear
Another Netflix specialty website is InstantWatcher, a clean website that allows for easier movie search than you'll find on the Netflix homepage. And while many outlets toast InstantWatcher for its quick and robust search functionality, we like it because it also lists the notable films that will disappear from Netflix Instant soon. There's even a Twitter feed that does nothing but tweet out the names of soon-to-be-expired Netflix movies. There is no worse feeling, in the whole entire world, than sitting down to watch a movie you've had in your Netflix queue only to discover that the movie has disappeared. Don't let it happen to you again.
Don't Be Afraid To Quit
One of the really nice things about a Netflix subscription is that you pay month-by-month; it's not like a cell phone contract where you're locked in for two years and you have to pay an exorbitant fee if you want to get out early or cancel service. With Netflix, you can quit for one month and come back the next: Netflix will save your queue and ratings for up to two years so that if you do come back, you don't really have to start over. So, if you're taking a vacation, or studying for the LSATs, or going to prison, just cancel your account and save yourself the $8 for as long as you need. Or, if you are one of our Olympian Netflix bashers from above, go ahead and try life without the 'Flix for a month or two and see how you do. Your account information will be waiting for you when (or if) you return; and, hey, if you do, now you have plenty of new ways to find the excellent movies and TV shows you might have missed while in exile.