Netflix faces backlash after its chairman endorses Kamala Harris, leading to a wave of cancellations.
At a Glance
- Netflix account cancellations surged after co-founder Reed Hastings endorsed Kamala Harris and donated millions to her campaign.
- Netflix’s churn rate nearly tripled in the US following Hastings’ endorsement.
- July 26 marked Netflix’s worst day for cancellations in 2023.
- Customers and Trump supporters called for a boycott of Netflix.
Surge in Cancellations Following Endorsement
Netflix is experiencing a significant surge in account cancellations following a public endorsement of Kamala Harris by its co-founder and chairman, Reed Hastings. The company saw its churn rate nearly triple in the United States after Hastings confirmed his support for Harris and made a substantial $7 million donation to her campaign.
The New York Post reports that cancellations peaked unusually high in the five days immediately following Hastings’ endorsement, marking July 26 as the single worst day for Netflix cancellations this year. Bloomberg also noted the unusual spike, reporting that the company’s average daily cancellations increased by 2.7 times compared to the two weeks prior.
Adding to the customer outcry, many Trump supporters called for a boycott of Netflix, falsely claiming that the company itself had donated to Harris. The hashtag #CancelNetflix trended across social media as frustrated subscribers shared their cancellation stories.
Impact on Netflix’s Operations and Image
The backlash against Netflix highlights the precarious balance companies must maintain when their executives take public political stances. Hastings’ $7 million donation stirred a particular uproar among conservative consumers, who felt alienated by the endorsement of Vice President Kamala Harris.
In another critical move, Netflix discontinued its basic ad-free plan, which contributed to a spike in cancellations. The combined effect of Hastings’ political endorsement and the policy change strained the company’s relationship with a segment of its customer base.
“Congrats to Kamala Harris — now it is time to win.” – Hastings
Despite the turmoil, it’s still unclear how these cancellations will affect Netflix’s long-term business operations since the company boasts 277.65 million global paid subscribers. Netflix’s significant cash flow and revenue generation—nearly $10 billion per quarter with over $2 billion in profits—may help mitigate the immediate financial impact of the cancellations.
Parallels with Other Corporate Boycotts
The incident also mirrors other social media-led boycotts against corporations perceived to intertwine their operations with political and diversity initiatives. Conservative activist Robby Starbuck, known for leading boycotts against companies with diversity, equity, and inclusion (DEI) practices, has highlighted this issue.
The New York Post detailed Netflix’s commitment to diversity initiatives since the Black Lives Matter (BLM) movement in 2020, including pledging to move 2% of its cash into black-owned banks and making significant donations to historically black colleges and universities (HBCUs).
“Say goodbye to another tough week in Hollywood. Disney cut about 300 jobs. Paramount implemented its second round of layoffs in the last few weeks. And John Malone, the godfather of cable, said streaming is a crappy business.” – Bloomberg
As Netflix prepares to announce its Q3 2024 results, the company’s executives, including co-CEOs Ted Sarandos and Greg Peters, alongside CFO Spence Neumann and VP Spencer Wang, will likely face questions regarding the fallout from Hastings’ endorsement. Hastings himself, who stepped down in January, remains silent on the matter, choosing not to respond to inquiries from news outlets like Fox News.
In the long run, Netflix and other companies must navigate the complex dynamics of public opinion, political affiliations, and corporate responsibility to sustain their business and consumer trust.
Sources
1. Netflix Cancellations Spiked After Reed Hastings Donated to Kamala Harris
