By Daily Mail (U.S.) | Created at 2024-09-30 20:07:11 | Updated at 2024-10-01 11:21:51
15 hours ago
Netflix saw cancellations spike after co-founder Reed Hastings said he was backing Kamala Harris.
Hastings, still serving as the streaming giant's chairman and the face of the company, said he had donated $7 million to her campaign as well.
The rate of cancellations - known as churn - nearly tripled in the US after Hastings' endorsement on July 22, according to research firm Antenna.
Netflix, the market leader by some margin - with 280 customers globally and 84 million in America - typically enjoys the lowest churn rate in the industry.
In July, US customers canceled their subscriptions at a rate of 2.8 percent, the highest monthly figure since February. That meant a loss of more than 2 million subscribers.
The cancellations coincided with Donald Trump supporters calling for conservatives to ax their subscriptions in response to Hastings' endorsement.
Netflix co-founder Reed Hastings, now serving as the streaming giant's chairman, donated $7 million to Kamala Harris's campaign. After news of the endorsement was revealed, Netflix saw a spike in cancellations.
Hastings, a longtime Democratic donor, endorsed Harris in a post on the social media platform X on July 22.
A day later, Hastings told The Information that he donated $7 million to a pro-Harris super PAC.
Bloomberg highlighted that July 26 marked the worst single day for Netflix cancellations this year, just three days after the donation news broke.
This increase is also linked to Netflix's decision to phase out its basic, advertising-free tier.
But experts said the five-day period following Hastings' endorsement stood out.
Hastings has been vocal in his political views, previously calling on President Biden to step down to make way for a stronger Democratic contender against Trump.
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.'
Netflix has tried to distance itself from Hastings' political activities.
But it doesn't always work. Earlier in the summer, he was one of the more vocal public figures calling for President Joe Biden to not stand again.
Netflix will release its latest earnings - for the third quarter from July to September - in mid-October. Analysts expect this to provide more detail on the impact on subscriptions.
Democratic candidate Kamala Harris was endorsed by Netflix co-founder Reed Hastings.
The endorsement by Reed Hastings upset supporters of Donald Trump. They urged Republicans to cancel their Netflix subscriptions
Netflix - with 277 million subscribers globally - is by far the biggest of the streamers.
The next closest is Amazon Prime Video, but that is largely because it bundles the service for free with its subscription service.
Until the setback in July, Netflix has been mostly adding customers in recent years.
A major part of that success has been its password sharing crackdown, which helped it add 13 million new customers last year.
Meanwhile, earlier this year it emerged Hastings donated 40 percent of his ownership stake in Netflix - worth $1.1 billion - to a charity popular with tech billionaires for its tax breaks and privacy.
Hastings made the donation to Silicon Valley Community Foundation after his Netflix stock surged following a strong earnings report.
