Netflix Faces Subscriber Backlash After Co-Founder’s Political Endorsement

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Netflix faces a subscriber revolt as co-founder Reed Hastings’ political endorsement sparks a surge in account cancellations.

At a Glance

  • Netflix’s US churn rate nearly tripled to 2.8% in July 2024 after Hastings endorsed VP Kamala Harris
  • Hastings donated $7 million to a super PAC supporting Harris, triggering backlash from Trump supporters
  • The hashtag #CancelNetflix trended as subscribers publicly shared their decisions to cancel
  • July 26 marked Netflix’s worst day for cancellations in 2024
  • The long-term impact on Netflix’s business remains unclear

Netflix Subscriber Exodus Following Political Endorsement

Netflix, the streaming giant, is facing an unprecedented wave of account cancellations following co-founder Reed Hastings’ endorsement of Vice President Kamala Harris. The endorsement, coupled with a substantial $7 million donation to a super PAC supporting Harris, has ignited a firestorm of controversy among subscribers, particularly those aligned with former President Donald Trump.

The backlash was swift and severe. Netflix’s US churn rate skyrocketed to 2.8% in July 2024, nearly tripling its previous rate and marking the highest level since February. The five days following Hastings’ endorsement saw an unusually high spike in cancellations, with July 26 standing out as Netflix’s worst day for cancellations in 2024.

Social Media Outcry and Boycott Calls

As news of Hastings’ political move spread, the hashtag #CancelNetflix began trending on social media platforms. Frustrated subscribers took to these platforms to publicly share their decisions to cancel their subscriptions, further fueling the controversy. Some Trump supporters called for a boycott of Netflix, mistakenly claiming that the company itself had donated to Harris’s campaign.

“Congrats to Kamala Harris โ€” now it is time to win.” – Hastings

This quote from Hastings, congratulating Harris, further inflamed the situation. It’s worth noting that while Hastings made the endorsement and donation personally, many subscribers conflated his actions with those of Netflix as a company.

Compounding Factors and Broader Context

The timing of this controversy couldn’t have been worse for Netflix. The surge in cancellations coincided with the company’s decision to discontinue its basic ad-free plan, potentially compounding the issue. This perfect storm of events led to a significant increase in Netflix’s average daily cancellations, which rose by 2.7 times compared to the previous two weeks from July 25-29.

“Biden needs to step aside to allow a vigorous Democratic leader to beat Trump and keep us safe and prosperous.” – Hastings

This incident is not isolated but follows a pattern of social media-led boycotts against companies perceived as having political leanings or diversity initiatives. Many companies, including Netflix, implemented diversity initiatives following the 2020 Black Lives Matter movement. However, these efforts have sometimes intersected with politics, leading to backlash from certain consumer groups.

The Road Ahead for Netflix

As of June 30, 2024, Netflix boasted an impressive 277.65 million global paid subscribers, generating nearly $10 billion in quarterly revenue. However, the long-term impact of this cancellation surge on Netflix’s business remains unclear. The company is set to announce its Q3 2024 results on October 17, 2024, which may provide more insight into the financial repercussions of this incident.

While the immediate effects of the cancellations are evident, it’s important to note that Netflix has shown resilience in the past. The company’s stock price has recovered to over $700 per share after falling below $200 in 2022. As the dust settles on this controversy, all eyes will be on Netflix’s upcoming financial report to gauge the true impact of this political firestorm on the streaming giant’s bottom line.

Sources:

  1. Netflix cancellations nearly tripled after co-founder Reed Hastings endorsed Kamala Harris: report
  2. Netflix Cancellations Nearly Tripled After Chairman Reed Hastings Endorsed Kamala Harris
  3. Netflix Cancellations Spiked After Reed Hastings Donated to Kamala Harris
  4. Netflix saw highest day of cancellations this year after co-founder’s $7M donation to Harris campaign: report
  5. Netflix cancellations nearly tripled in the US after co-founder Reed Hastings endorsed Kamala Harris: Report

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