Netflix: A Case for Shareholder Activism

Do I own Netflix? That is the question everyone concerned about Netflix’s recent promotion of the film Cuties should be asking themselves. Much has been said in conservative media about this film, but little of it has been oriented toward actual productive change at the company responsible for its appalling marketing campaign. It is as if conservatives regard Netflix as some foreign political power, the workings of which we have no say in. But nothing could be further from the truth: Netflix is a publicly traded company, which means the true owners are its shareholders. As it is a large-cap company, listed on the widely held S&P 500, a large number of Americans own stock in Netflix in one way or another. Ordinary investors have the power to be a check on any publicly traded company and to help prevent something like what happened with Cuties from happening again.

Some brief background for those who are not up to date on this controversy: Netflix advertised a French film by the name of Cuties with a scandalous poster featuring pre-teens dressed like members of a pop band from the 2000s, and a description that peddled it as an empowering story of an 11-year-old girl “rebelling against her conservative family’s traditions” through highly sexualized dancing. There is some debate over the film’s actual content, leaving aside Netflix’s marketing, with the director herself arguing that it was intended as a criticism of how modern culture sexualizes and exploits young girls — a story about a young girl caught between the explicit misogyny of radical Islam and the implicit misogyny of libertine modernity. But even if we assume for the sake of argument that her defense is valid, Netflix’s conduct was still inexcusable — perhaps even more so because it took a film that might have had some nuanced things to say about how our own society can degrade and turned it into the exact thing that part of the film was railing against. In any event, Netflix was implicitly valorizing erotic dancing by children as a liberating act of rebellion against outdated norms.

Needless to say, this has embroiled Netflix in a massive controversy, prompting it to remove the film’s poster and blurb from the site and publicly apologize. Three sitting Republican senators called for an explanation from Netflix directly. Among them was Senator Ted Cruz, who, to his great credit, sent a letter to the Department of Justice asking that it investigate whether Netflix violated federal laws against the production of child pornography. Four state attorneys general have asked Netflix to remove the film from its catalogue.