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Netflix Inc (NASDAQ: NFLX) shares dipped on Monday — even as the markets ended the day in the green — after a report indicated that the subscription video on demand service may be losing subscribers due to the controversy over “Cuties,” Fox Business reported.
What Happened: The research firm YipitData, which authored the report, said the number of customers who didn't renew their subscription began to increase after the film was released on the platform earlier this month, Fox Business noted.
The daily subscriber churn at Netflix, as of Saturday, hit a multi-year high, with eight times more customers not renewing their subscriptions than in August.
A petition demanding that the Maïmouna Doucouré-directed film be removed from Netflix, and the streaming platform be charged with “Distribution of Inappropriate Child Material,” gained 626,689 signatures as of press time.
Why It Matters: YipitData believes that the stir against the film would intensify in the coming days, as per Fox Business.
The outcry arose due to a promotional poster and the alleged “sexualized behavior” of the movie’s child actors according to the New Yorker.
The backlash has also spread to the political circles with Senator Ted Cruz (R-Texas) and other members of Congress calling for subscribers to "#CancelNetflix." Cruz also called for a criminal investigation of Netflix in relation to the movie.
Representative Tulsi Gabbard (D-Hawaii) called Cuties “child porn” on Twitter, claiming the film would “will certainly whet the appetite of pedophiles [and] help fuel the child sex trafficking trade.”
Netflix says they have updated pictures and description of the movie. “We're deeply sorry for the inappropriate artwork that we used for Mignonnes/Cuties,” a company spokesperson told Fox Business.
Price Action: Netflix shares closed 1.2% lower at $476.26 on Monday. The shares gained nearly 1.2% in the after-hours session.
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