Netflix, the reigning champion of streaming services, witnessed an unprecedented surge in cancellations following a controversial political endorsement by its co-founder and chairman, Reed Hastings.
The streaming behemoth, known for its iron grip on subscriber loyalty, suddenly found itself in choppy waters as viewers voted with their wallets.
Daily Mail reported that on July 22, Hastings publicly endorsed Democratic candidate Kamala Harris, revealing a staggering $7 million donation to her campaign.
The backlash was swift and severe.
Research firm Antenna revealed that Netflix’s cancellation rate in the US nearly tripled, skyrocketing to 2.8 percent in July – the highest monthly figure since February.
This mass exodus translated to a loss of over 2 million subscribers, a number that would make any streaming service executive break out in a cold sweat.
For Netflix, accustomed to boasting the lowest churn rate in the industry, this sudden reversal of fortune came as a particularly bitter pill to swallow.
The timing couldn’t have been worse, Daily Mail explained.
Netflix, with its 280 million global customers (84 million in America alone), had been riding high as the undisputed market leader.
In the days following Hastings’ endorsement, however, the streaming giant faced a perfect storm of controversy and cancellations.
Daily Mail noted that Donald Trump supporters led the charge, calling for conservatives to ax their subscriptions in response to Hastings’ political stance.
The fallout was immediate and measurable, with Bloomberg reporting that July 26 marked the worst single day for Netflix cancellations this year – just three days after the donation news broke.
While some experts point to Netflix’s decision to phase out its basic, advertising-free tier as a contributing factor, the five-day period following Hastings’ endorsement stood out as particularly damaging.
This isn’t the first time Netflix has found itself caught in the crossfire of its chairman’s political activities.
Despite attempts to distance itself from Hastings’ personal views, the company has struggled to maintain neutrality in the eyes of its diverse subscriber base.
Daily Mail added that earlier in the summer, Hastings made waves by publicly calling for President Joe Biden to step aside.
In an email obtained by the New York Times, he stated: “Biden needs to step aside to allow a vigorous Democratic leader to beat Trump and keep us safe and prosperous.”
Such outspoken political commentary from a high-profile tech executive has proven to be a double-edged sword for Netflix.
The full impact of this subscriber exodus will become clearer when Netflix releases its third-quarter earnings in mid-October.
Analysts are eagerly awaiting these figures, which will provide a more comprehensive picture of the cancellation trend’s long-term effects.
It’s worth noting that Netflix’s 277 million subscribers still make it the undisputed king of streaming services.
Its nearest competitor, Amazon Prime Video, largely owes its subscriber numbers to bundling the service with its popular subscription offering.
Prior to this July setback, Netflix had been on a roll, consistently adding customers to its already impressive roster.
A significant driver of this growth has been the company’s crackdown on password sharing, which helped bring in 13 million new customers last year.
In an interesting twist, it was recently revealed that Hastings had donated 40 percent of his Netflix ownership stake–a whopping $1.1 billion–to the Silicon Valley Community Foundation, a charity favored by tech billionaires for its tax benefits and privacy protections.
As the dust settles on this tumultuous period for Netflix, industry watchers and subscribers alike are left wondering: will this be a mere blip on the radar for the streaming giant, or the beginning of a more significant shift in the competitive landscape of digital entertainment?
The post Netflix Subs Plunge by Millions After Boss’ Controversial Presidential Call appeared first on Resist the Mainstream.
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Author: Jordyn M.
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