Netflix Case Study: Recovering from the Global Cuties Crisis
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Netflix Case Study: Recovering from the Global Cuties Crisis By Joy Blea, Maya Enos, Katelin Izumigawa, Stella Sanchez & Ell Tinsley Public Relations and Strategic Communication, Biola University PREL 460: Public Relations Leadership October 16, 2020 TABLE OF CONTENTS EXECUTIVE STATEMENT 4 STAGE 1: LEADERSHIP IN PR ORGANIZATIONAL PROBLEM ASSESSMENT 5 SYNOPSIS OF SITUATION 5 WHY THIS IS PUBLIC RELATIONS 5 PRIMARY PUBLICS 6 SITUATION BETWEEN NETFLIX AND THEIR PUBLICS 6 STAGE 2: ORGANIZATIONAL BACKGROUND & CASE STUDY 7 ORGANIZATIONAL CONTEXT & BACKGROUND 7 History with Stakeholders 9 Channels of Communication 13 SITUATIONAL BACKGROUND 19 Popular Press 19 Significant Academic Journals 21 STAKEHOLDER RESEARCH 23 COMPETITOR RESEARCH 26 Disney+: “Boycott Mulan” 26 HBOMax: Euphoria 27 Hulu: Blackish “Please, Baby, Please” 28 Amazon Prime Video: Banning of A Child’s Voice 29 Apple TV: Banker 29 Competitor Opportunities 30 STAGE 3: SITUATIONAL ANALYSIS TIMELINE & IMPACT 31 TIMELINE 31 KEY METRICS 35 NETFLIX’S COVERAGE & MARKETING OF CUTIES 36 Influencers & Social Media Influencers 37 Main-stream Media 38 Top Sources 39 TRACKING OF SENTIMENT 39 STAGE 4: THEORETICAL CRITIQUE 42 CURRENT OCCURRENCES: THE FRAMING THEORY 42 FUTURE APPROACH: THE SITUATIONAL CRISIS COMMUNICATION THEORY 46 STAGE 5: PR LEADERSHIP RECOMMENDATIONS & EXECUTIVE COUNSEL 50 GOAL 1 50 GOAL 2 52 GOAL 3 55 PR LEADERSHIP COMPETENCIES 61 Recovering from the Global Cuties Crisis | 2 PR Ethics 61 Diversity 62 Organizational Listening 62 Organizational Messaging 63 APPENDIX 65 GROUP SUMMARY 101 HANDOUT 102 REFERENCES 103 Recovering from the Global Cuties Crisis | 3 EXECUTIVE STATEMENT August 18, 2020 marked the beginning of a crisis that ultimately led Netflix to lose more than 2.5 million subscribers in a matter of weeks. This portfolio serves as a complete analysis of the current scandal and will unfold exactly how, when and why Netflix’s promotion of the Sundance award winning film, Cuties led to such a crisis. We begin with a situational analysis based upon academic theory coupled with a broader understanding of the organization and press coverage. Key considerations include company culture, its key stakeholders and their sentiment, as well as Netflix’s core competitors and their crisis response experiences. The following public relations counsel recommends Netflix’s best course of strategic action to recover from the events that unfolded over the past two months. Recovering from the Global Cuties Crisis | 4 STAGE 1: LEADERSHIP IN PR ORGANIZATIONAL PROBLEM ASSESSMENT SYNOPSIS OF SITUATION The“#CancelNetflix” movement began trending on social media on August 18th, just shortly after Netflix had released the trailer and their original posters for the French film Cuties. The film is a controversial hot topic due to its supposed exploitative nature of what many saw as the sexualization of young girls. Regarding heavy topics, Netflix has joined multiple conversations to raise awareness over the past few years. However, the catalyst of this outrage was inappropriate marketing content, which ultimately served as a misrepresentation of the film. Upset stakeholders have actively shared their subscription cancellations via social media and are urging the streaming company to remove the film from their platform. WHY THIS IS PUBLIC RELATIONS Netflix neglected to take the appropriate steps to ensure accurate promotion of the film. Additionally, they failed to listen to and address their stakeholders speaking up on the matter, leaving many feeling unvalued and unheard. The streaming giant’s actions encouraged harsh bias that prevented users from considering the film’s proper intent. Netflix’s recent advocacy for social change is inconsistent with its audience’s perception of their brand as a sole distributor and creator of entertainment. Severed relationships with the brand are deeply rooted in a distrust for Netflix’s ethical discretion. Recovering from the Global Cuties Crisis | 5 PRIMARY PUBLICS Three key publics are most relevant to Netflix’s success and recovery. First, we will target those who participated in the #CancelNetflix movement. Secondly, we will look to the conservative Netflix subscribers (such as those involved in the Save the Children movement and the various politicians taking action, who may be or have previously been subscribers). Lastly we will focus on loyal Netflix subscribers. Despite their static nature through this controversy, Netflix cannot afford to ignore them. SITUATION BETWEEN NETFLIX AND THEIR PUBLICS As a result of Netflix's uninformed promotion of Cuties film, the company has ultimately turned many of their stakeholders against them. Faulty advertising, an unthoughtful apology, and the continuation of regular social media postings implies an unwillingness to take responsibility for their actions. Netflix’s key stakeholders interpret the lack of serious action and praise for the director’s social commentary as a supportive stance for the sexualization of young girls. Users attacked Netflix for providing easily accessible, pornographic imagery of young girls undressing themselves, which ironically contributes to the very problem that the film stands in opposition toward. Stakeholders feel disregarded and perceive Netflix as unwilling to consider diverse perspectives. Aside from marketing changes and empty apologies, Netflix remains firm in their stance, failing to humbly address subscribers’ concern and, instead, proclaims the wrongdoing of their audience in being uninformed until they watch the movie in full. Recovering from the Global Cuties Crisis | 6 STAGE 2: ORGANIZATIONAL BACKGROUND & CASE STUDY ORGANIZATIONAL CONTEXT & BACKGROUND The global entertainment powerhouse that has taken the world by storm, Netflix Inc. was founded in 1997 by serial entrepreneurs Reed Hastings and Marc Randolph.1 With humble beginnings as a provider of movie rentals by mail, Netflix has seen a great amount of growth and success as a direct result of the rapid changes in technology and ultimately the entertainment industry as a whole. The American technology and media services provider has “toppled the movie rental industry with [an] ever changing approach to home entertainment, having shifted from DVD rental by mail to now providing the instant streaming of thousands of movies, television shows, and television 2 series via the internet. Now operating on a global scale, the streaming platform is currently available worldwide with an exception of mainland China (due to local restrictions), Syria, North Korea, and Crimea (due to U.S. sanctions) and employs nearly 9,000 employees around the globe.3 Their mission is to entertain the world. “Whatever your taste, and no matter where you live, [Netflix] gives you access to best-in-class TV shows, movies and documentaries. [Netflix] members control what they want to watch, when they want it, with no ads, in one simple subscription. [They are] streaming in more than 30 languages and 190 countries, because great stories can come from anywhere and be loved everywhere. [Netflix is] the world’s biggest fan of entertainment, and [the provider 1 Netflix. (n.d.). Unlimited movies, TV shows, and more. Retrieved October 15, 2020, from https://www.netflix.com/ 2 Lüsted, M. A. (2013). Netflix: The company and its founders (p. 7). Minneapolis, MN: ABDO Pub. 3 Netflix (NFLX). (2020). Retrieved October 15, 2020, from https://www.forbes.com/companies/netflix/ Recovering from the Global Cuties Crisis | 7 is] always looking to help you find your next favorite story.4 Having recorded nearly 183 million global subscribers at the end of March 2020, Netflix Inc. is considered the global leader in a saturated sea of streaming platforms.5 They now have over 70 million followers on Facebook, 24.9 million followers on Instagram, more than 10 million followers across the Twitter platform and sees a subscriber count of 17.3 million on their YouTube Channel. With the increased amount of exposure over the past two decades, Netflix worked tirelessly to provide entertainment that ranks as the best of the best. Netflix Inc. now has a dedicated publicity team that is responsible for supporting their “global original series, films, documentaries, docu-series and stand-up comedy specials via earned media worldwide” and plays a large role in the relationship that Netflix has continued to build with its subscribers and fans around the globe.6 Netflix is not new to the controversial entertainment scene, having a recent history of content questioned by various audiences, yet a majority of their content is well-loved by subscribers. Because their platform is distinguished by original content, most of their coverage is focused here, regardless of sentiment. By expanding their library of Netflix Originals films and series, Netflix offers substantial knowledge and insight on cultural and social issues. Netflix succeeds as an entertainment company but leaves members on edge with seemingly inconsistent and racy film distribution. Critics seem to have unwavering appreciation for Netflix’s decisions. Unfortunately, Netflix has a track record of making subscribers feel unheard due to unfavorable responses or a lack thereof, yet 4 Netflix. (n.d.). Unlimited movies, TV shows, and more. Retrieved October 15, 2020, from https://www.netflix.com/ 5 Barrabi, T. (2020, June 17). Who founded Netflix? Retrieved October 15, 2020,