| Netflix suffered a surge in cancellations in the days after its co-founder and chairman, Reed Hastings, endorsed Kamala Harris for president and donated millions to her campaign. The rate of cancellations – churn in industry parlance – nearly tripled in the US after his endorsement, according to the researcher Antenna. The streaming giant has the lowest churn in the industry. Customers in the US canceled Netflix at a higher rate in July — 2.8% — than any month since February. That is largely due to the company's decision to phase out its basic tier. Basic was the cheapest advertising-free version of Netflix. But the five-day period after Hastings' endorsement was unusual, even for July. 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. Shortly after Hastings' endorsement, fans of Donald Trump began urging people to drop the service. Some posted photos showing they had closed their accounts alongside the hashtag #CancelNetflix. Three days later after the donation became public, July 26, was the single worst day for Netflix cancellations this year. The company declined to comment while Hastings didn't respond to a request for comment. The spike in cancellations at Netflix lasted just a few days. It wasn't as severe as the reaction in 2020 when conservatives asked Netflix to take down the French movie Cuties, which they felt exploited children. (Some of the people who attacked Netflix had not actually seen the movie.) The long-term effect of these incidents can be hard to gauge. Advertisers and companies were eager to speak out on social issues following the murder of George Floyd. Many companies raced to show their support for the Black community and started new programs or initiatives to promote diversity, equity and inclusion (or DEI). Netflix shifted cash to Black-owned banks while Hastings donated to historically black universities. Yet in recent years opponents have started to take on DEI initiatives. Sales of Bud Light tanked after an advertising campaign featuring a transgender influencer sparked a boycott by conservatives. Critics of DEI have been emboldened since the Supreme Court ruled affirmative action programs designed to boost racial diversity on college campuses are discriminatory. Entertainment companies have faced a backlash after their executives took a stance on political issues. Walt Disney spent two years battling Florida Governor Ron DeSantis after the company criticized a law that restricts classroom discussion of sexual orientation and gender identity. The company has also faced questions in recent weeks for the close relationship between Harris and its entertainment co-chair, Dana Walden, who oversees ABC News. Hastings has always been civic-minded. He was working on education reform when he started Netflix and has devoted a lot of time and money over the years to charter schools. As his wealth has grown, he and his wife have given billions to philanthropic causes. He wasn't as outspoken about elections until more recently. But earlier this year, he was a vocal and public member of the chorus of celebrities and executives calling for Joe Biden to step out of the presidential race. Netflix has always tried to keep Hastings' donations and politics separate from its business. Eager to appeal to viewers of all persuasions all over the world, the company is sensitive to any perception that it's politically biased. (Disney faces a similar conundrum.) Like most companies in entertainment and Silicon Valley, Netflix's employees lean to the left politically. Co-CEO Ted Sarandos is married to Nicole Avant, a former ambassador in the Obama administration. Sarandos and Avant are active in politics and were advocates for Rick Caruso in the Los Angeles mayoral race in 2022. It won't take too long to figure out if this tempest caused any short-term pain for Netflix. The company reports financial results in mid-October. Following the box-office struggles of Fly Me to the Moon and Argylle, Apple is reconsidering how many of its movies to put in theaters. It's also looking to cut costs. The company wants to make a dozen or so movies with budgets of less than $100 million — spending close to $1 billion a year — but for its streaming service, not cinemas. Apple will still take a big swing or two for theaters — like next year's F1 — but it's not going to be giving lots of auteurs nine figures to make whatever they want. Thomas Buckley and I broke down the new strategy in the latest issue of Businessweek. John Malone shares his view of the futureJohn Malone is one of the most powerful figures in media. He's also one of the most press shy. So it was a big deal when he granted an interview to Wall Street analyst Craig Moffett. I picked the three most interesting comments from Malone, who is a large shareholder of Warner Bros. Discovery, Live Nation Entertainment and Charter Communications, to name a few. - Streaming is a bad business. Malone blamed greedy sports leagues and team owners for the collapse of the pay-TV bundle and lamented that cable companies and media companies never figured out how to offer networks a la carte. He also said he wished the government had forced companies to do so. (A bit ironic for a guy who is generally anti-regulation).
- Netflix shouldn't overpay for sports. If the company pursues the most expensive sports rights, it will need to raise prices and could drive away customers.
- Tech will swallow everything. Malone's biggest gripe is with net neutrality, which means tech companies don't have to pay internet providers and phone companies for access to their pipes. As a result, Apple and Amazon got so big that they could outbid any entertainment company for any show or sporting event.
Legalizing gambling looks like a mistakeIt turns out the legalization of gambling has been terrible for society, according to some new research papers. "The rise of sports gambling has caused a wave of financial and familial misery, one that falls disproportionately on the most economically precarious household," according to an article in the Atlantic. The piece cites several research papers that show the legalization of betting has depleted households' savings, increased the risk of bankruptcy and an increase in domestic violence. Meanwhile professional bettors are disguising themselves to trick sportsbooks. Deals, deals, deals - Brian Williams is going to host an election-night special for Amazon, the retail giant's first real move into TV news.
- Bari Weiss raised $15 million. What began on Substack is now worth more than $100 million.
- Comcast sued Warner Bros., claiming it has the right to be involved in HBO series such as Harry Potter.
- Dish and DirecTV are closing in on a merger agreement. The two companies would have a combined 26% share of the pay-TV market, per Bloomberg Intelligence.
- Shares of the French video-game company Ubisoft plunged to their lowest level in more than a decade. Jason looks at what's gone wrong at the maker of Assassin's Creed.
Friend of Screentime Peter Kafka has revived his podcast with a new name: Channels. His first two guests were the editor-in-chief of the New Yorker and the CEO of YouTube. Time to check it out. | 
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