Reed Hastings Supports Kamala Harris, Leading to Increased Netflix Cancellations

In July 2024, Netflix encountered an unexpected rise in cancellations after co-founder and chairman Reed Hastings publicly endorsed Kamala Harris’s presidential campaign. Hastings, a prominent Democratic supporter, shared his endorsement on social media, coinciding with a substantial donation of $7 million to a pro-Harris super PAC.

While Netflix typically boasts one of the lowest churn rates in the streaming industry, Hastings’ political involvement resulted in a short-lived yet significant spike in cancellations for the platform. According to the research firm Antenna, the cancellation rate surged nearly threefold in the days following Hastings’ endorsement, reaching its peak on July 26.

This marked the highest number of cancellations for Netflix in 2024, amplified by political tensions as supporters of Donald Trump and conservative commentators rallied around the #CancelNetflix movement. Although this represented a temporary rise in Netflix cancellations, it rekindled discussions about the impact of corporate leaders’ political endorsements on business success.

How Did Reed Hastings’ Endorsement Trigger Netflix Cancellations?

The mass cancellation among Netflix subscribers, particularly conservative viewers, followed Reed Hastings’ public endorsement of Kamala Harris. His social media announcement incited Harris’ adversaries, including supporters of Donald Trump, to promote the #CancelNetflix hashtag, aiming to persuade others to cancel their subscriptions.

This movement quickly gained momentum, resulting in a significant uptick in the churn rate within days. The reaction mirrored past instances, reminiscent of conservative boycotts of Netflix that occurred in 2020 over the film Cuties. However, despite the increase, Netflix cancellations remained relatively modest this time around.

Reports indicate that the churn rate surged to three times the normal rate for Netflix, persisting for several days. Nonetheless, this situation raises questions about the financial consequences of political endorsements on consumer behavior amidst escalating political division.

Was the Spike in Netflix Cancellations Due to Politics or Other Factors?

While Hastings’ endorsement of Harris undeniably played a significant role in the increase, other elements may have contributed to the rising cancellations. In July, Netflix eliminated its basic, non-advertisement subscription tier, which likely caused dissatisfaction among subscribers and pushed the churn rate to 2.8%—the highest since February.

However, the timing of the spike directly following Hastings’ political endorsement suggests that political factors were, indeed, influencing the wave of Netflix cancellations. While gauging the precise political impact is challenging, Hastings’ support for Harris coincided with growing customer unease, potentially amplifying reactions to pricing changes. Although some subscribers may have viewed the cancellations as a response to the altered subscription structure, for others, it could have been the final straw.

Can Entertainment Companies Avoid Political Backlash?

The surge in Netflix cancellations highlights a growing concern for entertainment companies whose leaders express political views. Reed Hastings is not the first executive to attract consumer backlash due to political endorsements; recent disputes, such as between Walt Disney and Florida Governor Ron DeSantis, illustrate the delicate balance these leaders must maintain.

In today’s politically charged climate, companies find themselves under increasing public scrutiny regarding private donations and the resulting consumer boycotts. While long-term implications remain uncertain, controversy at Netflix has historically subsided without significant losses in subscribers.

Nonetheless, this incident underscores a broader trend of consumers responding negatively to companies based on their political affiliations, posing ongoing risks for businesses as they navigate a sharply divided political landscape.

Source