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Netflix cancellations surge following 'Cuties' backlash: RPT

Netflix cancelations are on the rise as the streaming giant faces serious backlash over the French film, "Cuties." Yahoo Finance's Alexandra Canal joins Zack Guzman to break down the latest.

Video Transcript

ZACK GUZMAN: And, Ally, I mean, we've seen controversy before, but maybe not like this.

ALEXANDRA CANAL: Right. And Netflix is no stranger to backlash. But it looks like this time around, it could be leading to actual cancellations.

So just a bit of background here before I get into this data. "Cuties" is the film that's in question. It's a French coming-of-age movie.

And critics of this film, which do include high-profile politicians like Republican Senator Ted Cruz, say that the film oversexualizes young girls. Now, because of that, the #CancelNetflix began trending all over social media, and it looks like that crusade against the company is starting to stick because according to subscription analytics from Antenna, Netflix cancellations surged nearly five times the normal amount following the release of "Cuties." A separate report by analytics firm YipitData confirmed that spike as well with cancellations running at nearly eight times the daily levels that were observed back in August, even reaching a multi-year high.

That company also telling me that Netflix's churn rate rose substantially this past weekend as a result of the canceled Netflix backlash. Now, on top of all of that data, Antenna also compared this current cancellation rate to the last big event that caused Netflix to lose some subscribers here, which was the release of Disney+ back in November. And as you can see, this event is a lot more substantial, 5 times that normal daily rate versus only 1.7 times back in November following the launch of Disney+.

Now, this is not anything new. Netflix has faced some backlash in the past. Earlier this summer, they released the film, "365 Days," many people saying that that glorified sex trafficking. But when it comes to how these controversies will actually impact the overall bottom line at Netflix as well as their subscriber base, I don't think we're going to see too much of a lasting impact.

Netflix has well over 182 million worldwide subscribers. They are certainly the leader in this space here. But what these callouts do, what these protests do is they put a very fine lens on the company.

And I think we're seeing that pressure for a lot of big tech firms right now. Earlier this week, we saw Facebook under pressure after that Instagram and Facebook boycott. Major celebrities like Kim Kardashian-West and Demi Lovato participated in that in order to combat hate speech and misinformation.

And similarly to what we're seeing with Netflix, it didn't really create any immediate changes. Nothing really happened at Facebook. However, it did shine a very bright light on some of the areas that Facebook needs to continue to address.

Now, I did reach out to Netflix for comment on this. They did not get back to me. Currently, the stock is down about 2 percentage points here. But, again, this is something that all of these firms have to keep in mind because at this current moment in our history, nothing and no one is safe from-- from this backlash.