by Lucas Shaw, Bloomberg
Netflix suffered a surge in cancellations in the days after its co-founder and chairman, Reed Hastings, endorsed Kamala Harris for president and donated millions to her campaign.
The rate of cancellations – churn in industry parlance – nearly tripled in the United States after his endorsement, according to the researcher Antenna. The streaming giant has the lowest churn in the industry.
Customers in the United States cancelled Netflix at a higher rate in July - 2.8% - than any month since February.
That is largely due to the company's decision to phase out its basic tier. Basic was the cheapest advertising-free version of Netflix. But the five-day period after Hastings' endorsement was unusual, even for July.
Hastings, a longtime Democratic donor, endorsed Harris in a post on the social media platform X on 22 July. A day later, Hastings told The Information that he donated $7 million to a pro-Harris super PAC.
Shortly after Hastings' endorsement, fans of Donald Trump began urging people to drop the service.
Some posted photos showing they had closed their accounts alongside the hashtag #CancelNetflix. Three days later after the donation became public, 26 July, was the single worst day for Netflix cancellations this year.
The company declined to comment while Hastings didn't respond to a request for comment.
The spike in cancellations at Netflix lasted just a few days. It wasn't as severe as the reaction in 2020 when conservatives asked Netflix to take down the French movie Cuties, which they felt exploited children.
The long-term effect of these incidents can be hard to gauge. Advertisers and companies were eager to speak out on social issues following the murder of George Floyd. Many companies raced to show their support for the Black community and started new programs or initiatives to promote diversity, equity and inclusion (or DEI).
Netflix shifted cash to black-owned banks while Hastings donated to historically black universities.
Yet in recent years opponents have started to take on DEI initiatives.
Sales of Bud Light tanked after an advertising campaign featuring a transgender influencer sparked a boycott by conservatives. Critics of DEI have been emboldened since the Supreme Court ruled affirmative action programs designed to boost racial diversity on college campuses are discriminatory.
Entertainment companies have faced a backlash after their executives took a stance on political issues.
Walt Disney spent two years battling Florida Governor Ron DeSantis after the company criticised a law that restricts classroom discussion of sexual orientation and gender identity. The company has also faced questions in recent weeks for the close relationship between Harris and its entertainment co-chair, Dana Walden, who oversees ABC News.
Hastings has always been civic-minded.
He was working on education reform when he started Netflix and has devoted a lot of time and money over the years to charter schools. As his wealth has grown, he and his wife have given billions to philanthropic causes.
He wasn't as outspoken about elections until more recently. But earlier this year, he was a vocal and public member of the chorus of celebrities and executives calling for Joe Biden to step out of the American presidential race.
Netflix has always tried to keep Hastings' donations and politics separate from its business. Eager to appeal to viewers of all persuasions all over the world, the company is sensitive to any perception that it's politically biased. Disney faces a similar conundrum.
Like most companies in entertainment and Silicon Valley, Netflix's employees lean to the left politically.
Co-CEO Ted Sarandos is married to Nicole Avant, a former ambassador in the Obama administration. Sarandos and Avant are active in politics and were advocates for Rick Caruso in the Los Angeles mayoral race in 2022.
Netflix reports financial results in mid-October.
