Netflix’s disappointing third quarter earnings was the result of subscribers canceling their service at eight times the usual rate because of anger over the controversial French film Cuties, it has been reported.
Data unearthed by two analytics firms indicate that there was a sharp uptick in the number of people who cancelled their subscriptions at around the same time that calls were growing for a boycott of Netflix over its airing of Cuties.
Antenna, a data analytics firm that tracks Netflix subscribers, reported a ‘meaningful spike in churn rate’ shortly after the hashtag #CancelNetflix went viral.
‘Churn’ measures the number of subscribers who cancel pay services like Netflix for any reason, according to USA Today.
In mid-September, Antenna noted that Netflix was losing five times as many subscribers in the days after the release of Cuties than the company lost in the previous month.
Two data analytics firms reported that there was a surge in the number of Netflix subscription cancellations amid growing calls to boycott the streaming service over its distribution of Cuties, a French film that has been accused of ‘hyper-sexualizing children’
On Wednesday, Netflix sent a letter to its investors saying that it fell short of its subscriber goal last quarter. In the three month period which ended on September 30, 2.2 million global subscribers joined Netflix. Those results were a sharp drop from the first two quarters of this year when Netflix added 16 million and 10 million subscribers respectively
Antenna, a data analytics firm that tracks Netflix subscribers, reported a ‘meaningful spike in churn rate’ shortly after the hashtag #CancelNetflix went viral. In mid-September, Antenna noted that Netflix was losing five times as many subscribers in the days after the release of Cuties than the company lost in the previous month
Another analytics firm, YipitData, also reported in mid-September that ‘churn in the U.S. rose materially this weekend as a result of the “Cuties” backlash.’
Days after the hashtag went viral, YipitData reported that ‘disconnects were running at nearly 8x the daily levels observed in August and reached a multi-year high.’
New York-based YipitData, which sells information to institutional investors, aggregates and analyzes data sets that track the behavior of millions of US consumers including from panels for email receipts, online transactions, app data, and web traffic.
The two analytics firms would not say how they obtained the subscription data.
Since subscribers deal directly with Netflix, the streaming giant is the only company that has exact figures on its subscription rolls.
On Wednesday, Netflix sent a letter to its investors saying that it fell short of its subscriber goal last quarter.
In the three-month period which ended on September 30, 2.2 million global subscribers joined Netflix. Of those, just 180,000 signed up for the service in the United States.
Cuties, released by Netflix on September 9, tells the story of a French dance troupe
The French-Senegalese director of Cuties, Maïmouna Doucouré, has defended her film after coming under a barrage of criticism over claims it hyper-sexualizes young girls
Those results were a sharp drop from the first two quarters of this year when Netflix added 16 million and 10 million subscribers respectively.
Netflix, which anticipated a drop in the number of subscribers during third quarter, told investors that the easing of coronavirus lockdowns as well as stronger competition from streaming services would likely lead to a slowdown in growth.
Cuties, directed by French-Senegalese Maïmouna Doucouré, tells the story of Amy, an 11-year-old girl who chafes against her strict Muslim parents and finds solace with a dance troupe.
Inspired by music videos and social media, the girl group learns and practices provocative and sexualized choreography in preparation for a dance competition.
Doucouré says that the film, set in a poor suburb of Paris, is inspired by her own experiences, and is a social commentary on the need to protect children.
But the film, which shows the young girls in provocative dance poses, has been accused of ‘hyper-sexualizing children.’
The movie has sparked anger since its September 9 Netflix release, prompting calls for a boycott of Netflix. The hashtag #CancelNetflix began trending on social media.
Netflix did not produce or develop Cuties.
Instead, it bought the rights to distribute the film after it won critical acclaim at the Sundance Film Festival, where it debuted in January.
Senator Ted Cruz, the Republican from Texas, urged the Department of Justice to investigate the production and distribution of the film, including anyone involved
Cruz wrote a letter to Attorney General Bill Barr calling on him to investigate the matter
The company has faced legal consequences for streaming Cuties.
On September 23 a grand jury in Texas indicted Netflix, accusing the California-based firm of broadcasting lewd material in their state.
Netflix said Cuties ‘is a social commentary against the sexualization of young children’ in a statement to NBC News.
‘The charge is without merit and we stand by the film.’
Texas Senator Ted Cruz has been leading the campaign against the film.
Cruz sent a letter to Attorney General William Barr, saying the film ‘sexualizes young girls, through dance scenes simulating sexual activities, including one scene exposing a minor’s chest.’
He explained on social media: ‘Following Netflix’s disturbing promotion of “Cuties,” I sent a letter calling on the DOJ to investigate whether Netflix, its executives, or the filmmakers violated any federal laws against the production and distribution of child pornography.’
Cruz urged the Department of Justice to investigate the production and distribution of the film, including anyone involved.
The campaign to cancel Netflix appeared to be growing judging by tweets
One Twitter user tweeted the hashtags #CancelNetflix and #SaveOurChildren
The hashtag #CancelNetflix was trending on Twitter as reaction to Cuties was fierce
Some social media users accused the movie of ‘child porn’
Social media users have hit out at people defending the movie, with dancing 11-year-old girls
One Twitter user noted that Netflix apologized for its movie poster, saying it was ‘inappropriate’
Democrat Tulsi Gabbard accused Netflix of being complicit in encouraging pedophilia
House Rep. Tulsi Gabbard, a Democrat from Hawaii, found rare common ground with Cruz, agreeing that the film was unacceptable and accusing Netflix of being complicit in encouraging pedophilia and child trafficking.
‘Netflix child porn “Cuties” will certainly whet the appetite of pedophiles & help fuel the child sex trafficking trade. 1 in 4 victims of trafficking are children. It happened to my friend’s 13 year old daughter. Netflix, you are now complicit. #CancelNetflix,’ Gabbard wrote.
Despite Netflix’s weaker-than-expected third quarter, it remains a behemoth in the world of streaming content.
The company boasts 195 million subscribers worldwide, of which 73 million are in North America.
By year’s end, Netflix expects to cross the 200 million subscriber threshold.