Netflix chief Ted Sarandos has pinpointed the mistake he made in the management of the fallout from the Dave Chappelle controversy that sparked a staff walkout, but still maintains the decision he made was correct.
The streaming giant’s employees and their supporters staged a walkout back in October 2021 to protest a recently released comedy special from comedian Chappelle that mocked transgender people.
The moment proved to be the first of several dark clouds that formed over Netflix across the following months—and last up to this day.
Faced with an employee mini-uprising over the comedy special, co-CEO Sarandos initially defended it, saying it wouldn’t cause harm, before quickly walking back his comments.
Months later, an updated culture guideline laid down the law for any disgruntled employees, declaring in no uncertain terms that if they had a problem with any Netflix content in the future, they should quit.
Then came the deepest cut to the onetime darling of Wall Street.
Netflix’s first-quarter earnings report, released in April this year, was a bloodbath.
The company lost 200,000 net subscribers to start the year—its first quarterly decline in a decade—and projected another 2 million net subscriber defections in the next three months. First-quarter year-over-year revenue growth slumped from 24% in 2021 to 10% in 2022.
Netflix’s share price is currently down 74% from its November 2021 peak.
First flash point
Sarandos is still asked what he regrets about that first flash point for the company back in 2021.
Speaking to an audience of advertising and marketing professionals at the Cannes Lions festival in France, Sarandos said: “I wish we had done it cleaner.
“There were some folks who worked inside Netflix who were really upset, and they were hurting, and I kinda gave them a matter-of-fact answer about expression and those things.
“I should’ve been more empathic to them directly, and that’s the thing I regret. But I do think the decision was very important globally.”
Expanding on the delicate balance content producers face when commissioning comedy, he added: “We’re programming to people of a real variety of tastes and sensibilities and how they were brought up, and what they think is offensive and what they think is damaging to themselves or to children.
“So trying to land the same thing for everyone is an impossible feat. What I can do is say, ‘Let’s pick real carefully who we do business with, and let’s support their free speech and free expression.’
“People are not going to like all of it, but if it’s an art form they’re great at, then we’ll make our choices that way. It won’t make everybody happy, but that’s the beauty of on-demand, you can just turn it off.”