After Netflix’s co-founder Reed Hastings endorsed Kamala Harris and revealed a $7 million donation to her campaign, the streaming giant saw a spike in cancellations.
The churn rate in the US nearly tripled, reaching 2.8% in July, which was the highest since February. This led to a loss of over 2 million subscribers.
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The cancellations were notably driven by backlash from Donald Trump supporters, who urged fellow conservatives to cancel their subscriptions.
Hastings’ support for Harris, announced on social media and followed by comments on President Biden needing to step aside for a stronger Democratic contender, triggered criticism and cancellations.
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The fallout coincided with Netflix’s decision to phase out its basic, ad-free tier, which may have contributed to the increased churn.
The impact of Reed Hastings’ endorsement was highlighted by research from Antenna and Bloomberg, marking July 26 as the worst single day for cancellations this year, just three days after the news of his donation broke.
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Despite this, Netflix, which has over 277 million subscribers globally, remains the largest streaming platform. However, with upcoming earnings in mid-October, analysts are keen to see if the company can recover its momentum.
Reed Hastings, known for his political activism and previous criticism of President Biden, has also been in the news for donating 40% of his Netflix shares, worth $1.1 billion, to the Silicon Valley Community Foundation, a move popular among tech billionaires for its tax benefits and discretion in fund allocation.
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