Published on March 5, 2021
Netflix, the streaming media giant disrupting the film and television industries, has been thriving amidst the chaos of COVID-19. Globally, Netflix passed 200 million paid subscribers in 2020 as quarantines and lockdowns forced virtually everyone indoors.
As we found in the extensive survey at the heart of The Purpose Report, the vast majority of people – regardless of age, race, ethnicity or gender – are comfortable with companies making a profit. But they also believe that companies must have a purpose beyond profit. As Netflix helps the homebound through the coronavirus, it has also contended with potentially negative perceptions.
Netflix has built its footprint in content creation, including many who have traditionally struggled to get backing from established studios and production companies. Celebrities and creatives have returned the attention, engaging with Netflix content to an unprecedented degree.
Facing new competition from Apple, Disney, Comcast, WarnerMedia and other entertainment rivals, catering to its captive COVID-19 audience has made the streaming service harder to dislodge.
CEO Reed Hastings has earned a reputation as a brash operator as he led led Netflix from small-time to center stage through innovations in streaming content. But the pugnacious chief executive struck a more muted and conciliatory tone amidst the coronavirus confusion, telling an April 2020 earnings call that “our small contribution in these difficult times is to make home confinement a little more bearable.”
Co-CEO Ted Sarandos has made social purpose more integral to the Netflix brand. In February 2021 said Netflix would spend $100 million over five years to building a more inclusive content pipeline, including female directors and creators. Its first inclusion report says women now make up 47.1% of the workforce, including 47.8% of directors and above. There’s a catchup effort for Black employees in the U.S.; their numbers doubled in three years to 8% of the workforce and 9% of leadership.
In a time of racial reckoning, Netflix has showcased stories of women and minorities, from the series “Dear White People” to the Spike Lee drama “Da 5 Bloods.” In June 2020 it added Black Lives Matter to its content categories. A company-commissioned study of its scripted original content finds Netflix has improved its representation of women and minorities, making Netflix productions more inclusive than studio films. In June 2020 it added Black Lives Matter to its content categories.
Netflix also was quick to respond to public demand for information about COVID-19 with the Vox series “Coronavirus, Explained.” Parental control tweaks and Top 10 lists also enhanced the streaming service’s utility during lockdown.
Netflix maintained a heavy marketing presence during the pandemic, spending $900 million according to Pathmatics, a marketing data firm. The aggressive spend appeared to have paid off, allowing it to cut back against the onslaught of streaming competitors Disney+, HBO Max, Apple TV+ and Peacock.
Creatives have embraced the shared viewing experience of streaming media during the pandemic. “The world is being entertained through Netflix,” Fast Company observed, “and the creative community has coalesced around it in this moment of global crisis that has hit the entertainment world incredibly hard.” This has provided powerful earned marketing for the streaming pioneer, with little risk of a marketing misfire.
In the wake of George Floyd’s death, Netflix considered new ways to extend its economic impact to underserved communities. It earmarked 2% of cash holdings, initially up to $100 million, to Black banks and community development organizations, making Netflix one of the few Silicon Valley firms with a plan to address the racial wealth gap. Hastings previously pledged $120 million of his personal fortune to historically Black colleges and universities.
As schools moved to online learning, Netflix expanded a policy of providing free documentaries to teachers and took steps to support educators and parents trying to teach their children at home. A library of educational documentaries is free to stream on YouTube and parents and teachers are offered an array of digital education resources.
Netflix has worked to keep talent happy and supported during the COVID-19 lockdown, agreeing to pay talent guarantees when production shut down. With many creatives unable to work under COVID-19 conditions, the company in February 2021 increased its hardship fund for film and television industry workers to $150 million. Netflix had pledged $15 million to helping entertainment workers, including $1 million each to the SAG-AFTRA Foundation Covid-19 Disaster Fund, the Motion Picture and Television Fund and the Actors Fund Emergency Assistance.
As the coronavirus pandemic intensified pressure on European network infrastructure in March 2020, governments called on streaming video providers to change from high definition to standard definition to free up bandwidth. Rather than put up a fight on the issue as in the past, Hastings was quick to comply with EU requests. “Mr. Hastings has demonstrated a strong sense of responsibility and solidarity,” said Thierry Breton, the EU’s Internal Market and Services Commissioner. Sharp elbows are rarely welcome in a public health crisis, and Hastings displayed considerable care to modulate his tone and retain perspective on Netflix’s modest role in the COVID-19 response. Netflix has begun to return to normal speeds.
Netflix experienced an explosion of traffic and demand even as it was forced to send workers home. The company’s Help Page was updated to address the issues this has created. “We’ve had to reduce our support hours so our wait times may be higher than normal. … Support services will vary depending on the country you’re in – and as we continue to adjust with what works best given the current crisis. Your support is very important to Netflix. So we’re sorry for the inconvenience and appreciate your patience while we work through these issues.”
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