For-profit

Netflix

Screenshot of Netflix.com website (link)
Website:

www.netflix.com/

Location:

Los Gatos, CA

Formation:

1997

Co-CEOs:

Reed Hastings and Ted Sarandos

Type:

For-profit

Netflix is a media production and distribution company headquartered in California founded by Reed Hastings and Marc Randolph.

Netflix and its employees have become more openly left-leaning and politically active since the 2016 election cycle. In 2020, Netflix was the most Democratic-leaning major tech company in the United States by political donations. [1] The company has made controversial decisions regarding both its in-house and licensed content which indicate a commitment to political correctness. In 2018, Netflix signed a deal with the newly founded Higher Ground Productions, the production house formed by former President Barack Obama and First Lady Michelle Obama.

History

In August 1997, Netflix was founded by Reed Hastings and Marc Randolph, with Randolph serving as CEO. Hastings had previously founded Pure Atria, a software company he sold for $700 million, which was then the largest acquisition in Silicon Valley history. Randolph had been the marketing director at Pure Atria. According to CNBC, Hastings’s explanation for how he and Randolph came up with Netflix has changed numerous times. [2]

Based on Amazon’s e-commerce model, Netflix became the first online DVD rental service. After three years of losses, Netflix offered to sell itself to Blockbuster for $50 million. Blockbuster declined the offer. [3]

Netflix’s sales dramatically increased in the early 2000s, making it the fastest-growing customer of the U.S. Postal Service at the time. In 2003, Hastings became CEO and Randolph left the company. In 2007, Netflix began video streaming services. By 2010, Netflix was the largest source of video streaming traffic in North America. [4] Soon after, Netflix expanded to global markets. In 2011, Netflix began producing its own television and film content. By 2017, Netflix was making 1,000 hours of original content annually. [5] In the mid-2010s, Netflix emerged as the near-monopolistic market leader of streaming services until Hulu, Amazon Prime, and other companies copied Netflix’s model. As of January 2021, Netflix has over 200 million global subscribers. [6]

In July 2020, Netflix chief content officer Ted Sarandos was appointed co-CEO alongside Hastings. [7]

Left-Leaning Content

Netflix’s productions have been described as favoring left-leaning and “woke” perspectives. [8][9] A June 2018 survey by YouGov found that conservative viewership had declined by 15% over the previous year while liberal viewership increased by a similar amount. [10]

In May 2018, former President Barack Obama and First Lady Michelle Obama founded Higher Ground Productions, a film production venture. With the company’s establishment, it signed a multi-year deal with Netflix to produce film, television, and documentary projects for the platform meant to increase racial and ethnic diversity in entertainment. [11] In 2019, Netflix released Higher Ground Productions’s American Factory, a documentary which compared US and Chinese construction processes, and Becoming, a documentary about a Michelle Obama book tour. [12]

Controversies

“The Witcher” Casting Controversy

In 2018, Netflix announced the cast for its upcoming production of “The Witcher,” a television show based on a popular series of Polish novels and video games. Numerous key characters who were European or of European ancestry in the story were cast as racial minorities in the television show, prompting backlash from many fans of the series. [13]

“The Witcher’s” setting is based on Slavic folklore and the series is considered a major cultural product of Poland; in 2015, President Barack Obama received a “Witcher” video game as a gift from the Polish Prime Minister. [14] Hence, critics of Netflix considered “The Witcher’s” casting to be an instance of arbitrarily inserting non-white characters in the name of political correctness. They asserted that Netflix was acting hypocritically by disregarding the cultural heritage of a group that is almost entirely white while an equivalent policy toward a predominantly black cultural group would be considered racist and a form of cultural appropriation. [15]

“The Witcher” showrunner Lauren Hissrich defended the casting by claiming efforts to cast non-white actors would boost the global popularity of the show and wouldn’t undermine the Polish cultural elements in the story. [16]

Smoking in Netflix Shows

In July 2019, anti-tobacco advocacy group Truth Initiative released a report finding that the depictions of smoking in Netflix shows “House of Cards,” “Orange is the New Black,” and the third season of “Stranger Things” were more common than the smoking levels in average network television shows. Netflix responded by promising to reduce the presence of smoking in its shows. [17]

“Cuties”

In September 2020, Netflix released “Cuties,” a French-produced film about an 11-year-old Senegalese girl who immigrates to Paris and becomes a dancer. Critics objected that the film featured glamorized highly sexualized imagery of young girls bordering on child pornography. Netflix cancellations quickly reached their highest point ever, peaking at eight times the average daily rate. Netflix responded to criticism by defending “Cuties,” claiming it was meant as a social commentary against the sexualization of children. [18]

Firing of Jonathan Friedland

In June 2018, Netflix released a public statement that its public relations executive Jonathan Friedland was fired after seven years at the company for using the “n-word” twice at work. As the story gained national attention, independent journalist Todd Genger criticized media outlets for reporting the incident with misleading headlines and content that obscured the contexts in which Friedland spoke the word. [19][20]

Details emerged that Friedland first used the “n-word” in an internal PR meeting about sensitive content, and his usage had no aggressive or hateful connotations. When confronted, Friedland apologized for using the word. Months later, Friedland was in an unrelated meeting with two black employees of the human resources department who became upset that Friedland did not address his prior usage of the “n-word.” The employees then brought up the matter, and Friedland again spoke the word as a point of clarification. [21][22][23]

Friedland’s firing was announced internally at Netflix through a memo written by CEO Reed Hastings which declared that his privilege had caused him to “minimize” and “intellectualize” the first utterance of the “n-word” and therefore not take harsher measures against Friedland, but that there was no “way to neutralize the emotion and history behind the word in any context.” Genger and others have argued that Friedland’s usages of the “n-word” were not improper and his firing reflects Netflix’s excessive deference towards political correctness. [24]

In his public statement, Friedland apologized for being “insensitive.” [25]

Political Spending

Netflix Inc PAC

In April 2012, Netflix founded Netflix Inc PAC (FLIXPAC). Tech journalists speculated that Netflix would use the PAC to advocate for anti-piracy legislation that would penalize illicit streaming competitors. Netflix denied that the PAC would be used for this purpose. [26]

From 2012-2018, FLIXPAC donated $64,700 split about equally between Republicans and Democrats. Recipients have included Governor Gavin Newsom (D-CA), Senator Mike Lee (R-UT), Senator Patrick Leahy (D-VT), and Rep. Darrell Issa (R-CA). FLIXPAC did not donate money in the 2020 election cycle. [27]

Employee Political Donations

Since 1990, Netflix employees have donated over $15 million to political candidates and causes, with nearly all funds going to Democrats. In the 2020 election cycle, Netflix employees gave over $10.7 million with over 99% of individual contributions going to Democrats. According to a CNBC report, Netflix was the most Democratic-leaning major tech company in the United States. [28] The largest recipients were the Senate Majority PAC, the Movement Voter PAC, and the Future Forward PAC. Democratic presidential candidate Joe Biden received $467,502, compared to $1,815 to then-President Donald Trump. [29]

Netflix co-founder and CEO Reed Hastings has made hundreds of donations totaling hundreds of thousands of dollars to political candidates and organizations, with the vast majority of funds going to Democrats. [30]

Co-CEO Ted Sarandos has made 18 political donations exclusively to Democrats, including Barack Obama, Hillary Clinton, and Joe Biden. He has made three donations to the DNC Services Corp totaling almost $100,000. [31]

Lobbying

Netflix began lobbying in 2009 with $10,000 in expenditure. Lobbying increased quickly to over $1.2 million in 2015. Then expenditure fell to around $800,000 per year from 2016-2020. Nearly all of Netflix’s lobbying has concerned internet regulations and intellectual property-related bills. [32]

References

  1. Levy, Ari. “The most liberal and conservative tech companies, ranked by employees’ political donations.” CNBC. July 2, 2020. Accessed March 10, 2021. https://www.cnbc.com/2020/07/02/most-liberal-tech-companies-ranked-by-employee-donations.html. ^
  2. Castillo, Michelle. “Reed Hastings’ story about the founding of Netflix has changed several times.” CNBC. May 23, 2017. Accessed March 10, 2021. https://www.cnbc.com/2017/05/23/netflix-ceo-reed-hastings-on-how-the-company-was-born.html. ^
  3. Castillo, Michelle. “Reed Hastings’ story about the founding of Netflix has changed several times.” CNBC. May 23, 2017. Accessed March 10, 2021. https://www.cnbc.com/2017/05/23/netflix-ceo-reed-hastings-on-how-the-company-was-born.html. ^
  4. Arango, Tim; Carr, David. “Netflix’s Move Onto the Web Stirs Rivalries.” New York Times. November 24, 2010. Accessed March 10, 2021. https://www.nytimes.com/2010/11/25/business/25netflix.html?pagewanted=all. ^
  5. O’Brien, Chris. “Netflix announces 1,000 hours of new original content for 2017.” Venture Beat. February 8, 2017. Accessed March 10, 2021. https://venturebeat.com/2017/02/08/netflix-announces-1000-hours-of-new-original-content-for-2017/. ^
  6. Solsman, Joan E. “Netflix subscriber growth soars past 200 million members.” CNet. January 20, 2021. Accessed March 10, 2021. https://www.cnet.com/news/netflix-fourth-quarter-subscribers-soar-past-200-million-members-stock/. ^
  7. Hastings, Reed; Sarandos, Ted. “Ted Sarandos appointed co-CEO of Netflix.” Netflix. July 16, 2020. Accessed March 10, 2021. https://about.netflix.com/en/news/leadership-update. ^
  8. Smita M. “Netflix appears to have found the sweet spot of creating content that is both woke and commercially successful.” Meaww. August 8, 2020. Accessed March 10, 2021. https://meaww.com/netflix-creating-content-balance-of-woke-commercially-successful-politically-correct-millennials. ^
  9. Gomez, Luis. “Does Netflix lean left? Why conservatives may be tuning out in droves.” San Diego Union Tribune. June 4, 2018. Accessed March 10, 2021. https://www.sandiegouniontribune.com/opinion/the-conversation/sd-netflix-left-leaning-vs-conservatives-poll-20180604-htmlstory.html. ^
  10. Yung, Julius. Netflix becoming less popular among conservative viewers, new study finds.” Fox News. June 4, 2018. Accessed March 10, 2021. https://www.foxnews.com/entertainment/netflix-becoming-less-popular-among-conservative-viewers-new-study-finds. ^
  11. Neuman, Scott. “Obamas Sign Deal With Netflix, Form ‘Higher Ground Productions.’” NPR. May 22, 2018. Accessed March 10, 2021. https://www.npr.org/sections/thetwo-way/2018/05/22/613246456/obamas-sign-content-deal-with-netlfix-form-higher-ground-productions. ^
  12. Coleman, Nancy. “Michelle Obama’s Memoir ‘Becoming’ Will Be a Netflix Documentary.” New York Times. April 27, 2020. Accessed March 10, 2021. https://www.nytimes.com/2020/04/27/movies/michelle-obama-netflix-documentary-memoir-becoming.html. ^
  13. Taylor, Drew. “”Netflix’s The Witcher EP Lauren Hissrich Explains Race Changes: America has “Long and Checkered History of Enslaving, Abusing, and Deriding People Who Aren’t White.”” Bounding Into Comics. July 31, 2019. Accessed March 10, 2021. https://boundingintocomics.com/2019/07/31/netflixs-the-witcher-ep-lauren-hissrich-explains-race-changes-america-has-long-and-checkered-history-of-enslaving-abusing-and-deriding-people-who-arent-white/. ^
  14. Smith, Dave. “Poland’s Prime Minister loves this spectacular video game so much he gave it to Obama as a gift.” Insider. July 30, 2015. Accessed March 10, 2021. https://www.businessinsider.com/the-witcher-2015-7#:~:text=AP%2FAlik%20Keplicz%20The%20popular,Kings%22%20to%20commemmorate%20his%20visit.. ^
  15. Taylor, Drew. “”Netflix’s The Witcher EP Lauren Hissrich Explains Race Changes: America has “Long and Checkered History of Enslaving, Abusing, and Deriding People Who Aren’t White.”” Bounding Into Comics. July 31, 2019. Accessed March 10, 2021. https://boundingintocomics.com/2019/07/31/netflixs-the-witcher-ep-lauren-hissrich-explains-race-changes-america-has-long-and-checkered-history-of-enslaving-abusing-and-deriding-people-who-arent-white/. ^
  16. Taylor, Drew. “”Netflix’s The Witcher EP Lauren Hissrich Explains Race Changes: America has “Long and Checkered History of Enslaving, Abusing, and Deriding People Who Aren’t White.”” Bounding Into Comics. July 31, 2019. Accessed March 10, 2021. https://boundingintocomics.com/2019/07/31/netflixs-the-witcher-ep-lauren-hissrich-explains-race-changes-america-has-long-and-checkered-history-of-enslaving-abusing-and-deriding-people-who-arent-white/. ^
  17. Nedelman, Michael. “Netflix to cut back on smoking after ‘Stranger Things’ criticism.” CNN. July 5, 2019. Accessed March 10, 2021. https://www.cnn.com/2019/07/05/health/netflix-smoking-stranger-things/index.html. ^
  18. Spangler, Todd. “’Cuties’ Controversy: Surge in Netflix Cancellations Was Short-Lived, Data Shows.” Variety. September 25, 2020. Accessed March 10, 2021. https://variety.com/2020/digital/news/cuties-cancel-netflix-account-surge-data-1234783460/. ^
  19. Genger, Todd. “How Netflix F-d Up the N-word.” Medium. June 24, 2018. Accessed March 10, 2021. https://medium.com/@toddgenger/how-netflix-f-d-up-the-n-word-ff7fa71fa7db. ^
  20. “Netflix executive fired over repeated use of racial slur in front of colleague.” USA Today. June 23, 2018. Accessed March 10, 2021. https://www.usatoday.com/story/tech/news/2018/06/23/netflix-executive-racial-slur-jonathan-friedland/727823002/. ^
  21. Genger, Todd. “How Netflix F-d Up the N-word.” Medium. June 24, 2018. Accessed March 10, 2021. https://medium.com/@toddgenger/how-netflix-f-d-up-the-n-word-ff7fa71fa7db. ^
  22. “Netflix executive fired over repeated use of racial slur in front of colleague.” USA Today. June 23, 2018. Accessed March 10, 2021. https://www.usatoday.com/story/tech/news/2018/06/23/netflix-executive-racial-slur-jonathan-friedland/727823002/. ^
  23. Patten, Dominic; Chmielewski, Dawn C. “Netflix Fired Comms Chief Jonathan Friedland Over His Use Of The N-Word.” Deadline. June 22, 2018. Accessed March 10, 2021. https://deadline.com/2018/06/jonathan-friedland-out-as-netflix-communications-chief-following-insensitive-comments-1202415977/. ^
  24. “Netflix executive fired over repeated use of racial slur in front of colleague.” USA Today. June 23, 2018. Accessed March 10, 2021. https://www.usatoday.com/story/tech/news/2018/06/23/netflix-executive-racial-slur-jonathan-friedland/727823002/. ^
  25. Patten, Dominic; Chmielewski, Dawn C. “Netflix Fired Comms Chief Jonathan Friedland Over His Use Of The N-Word.” Deadline. June 22, 2018. Accessed March 10, 2021. https://deadline.com/2018/06/jonathan-friedland-out-as-netflix-communications-chief-following-insensitive-comments-1202415977/. ^
  26. Olanoff, Drew. “Netflix: Our PAC has nothing to do with supporting SOPA or PIPA.” The Next Web. April 9, 2012. Accessed March 10, 2021. https://thenextweb.com/insider/2012/04/10/netflix-our-pac-has-nothing-to-do-with-supporting-sopa-or-pipa/. ^
  27. “Netflix Inc PAC Expenditures.” Open Secrets. Accessed March 10, 2021. https://www.opensecrets.org/political-action-committees-pacs/netflix-inc/C00518233/expenditures/2012. ^
  28. Levy, Ari. “The most liberal and conservative tech companies, ranked by employees’ political donations.” CNBC. July 2, 2020. Accessed March 10, 2021. https://www.cnbc.com/2020/07/02/most-liberal-tech-companies-ranked-by-employee-donations.html. ^
  29. “Netflix Inc.” Open Secrets. Accessed March 10, 2021. https://www.opensecrets.org/orgs/netflix-inc/totals?id=D000036161. ^
  30. “Donor Lookup: Reed Hastings.” Open Secrets. Accessed March 10, 2021. https://www.opensecrets.org/donor-lookup/results?name=reed+hastings. ^
  31. “Donor Lookup: Ted Sarandos.” Open Secrets. Accessed March 10, 2021. https://www.opensecrets.org/donor-lookup/results?name=Ted+Sarandos. ^
  32. “Netflix Inc.” Open Secrets. Accessed March 10, 2021. https://www.opensecrets.org/orgs/netflix-inc/totals?id=D000036161. ^

Directors, Employees & Supporters

  1. Reed Hastings
    Co-Founder and Co-CEO
  2. Barack Obama
    Supporter
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Netflix

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Los Gatos, CA 95032