America’s culture wars are once again going after Netflix (NFLX) , but this time it’s Elon Musk leading the charge against the streaming service.
The owner of X (formerly Twitter) and CEO of Tesla (TSLA) is teaming up with a growing conservative campaign that tells people to “cancel Netflix” because they think the service promotes progressive values in kids’ shows.
The animated show “Dead End: Paranormal Park” was canceled in 2023, but has made news lately because of how it depicts a certain character. Musk stoked people’s outrage by sharing memes, offering his opinion on the show, and telling his 180 million followers:
Cancel Netflix for the health of your kids.
It’s important to remember that the streamer didn’t answer.
But Wall Street did. Netflix’s stock price fell sharply over the course of several sessions, losing billions of dollars in market value.
Some people say this is just another online firestorm, but investors need to ask a more important question: Is this controversy just noise, or does it show a bigger problem with Netflix’s brand, business model, or investor base?
Image source: Shutterstock
Netflix controversy: A culture war with financial consequences
What began as a small online backlash quickly turned into a well-known boycott campaign, mostly because Musk backed it.
In just a few days, the billionaire shared or commented on more than two dozen posts that criticized Netflix’s programming choices, especially its content for kids and teens.
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People who don’t like the company say that it puts political or ideological messages into shows for kids that don’t need them. Musk has said this repeatedly.
Some parents and commenters were still upset about scenes from “Dead End: Paranormal Park,” even though the show was canceled almost two years ago. They think it has an agenda.
Musk’s posts were full of memes and insults aimed at Netflix’s leaders. He said the company was sending “your kids” divisive messages.
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Hamish Steele, the creator of the show, fought back on social media, saying that many of the claims were false and that Netflix was not actively promoting the show.
But by that time, the anger had reached its limit. It was reported on by traditional media, repeated on conservative websites, and began to show up in the stock market.
It was no longer just a cultural problem; now investors were worried about it, too.
Netflix stock takes a hit, but is it durable?
After Musk’s posts, Netflix’s stock dropped by 2% to 3% over several sessions, and analysts think the company’s market value fell by about $15 billion.
That reaction, while not huge in the grand scheme of the company’s value, was important, especially since it seemed to be related to an online campaign rather than earnings or guidance.
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Netflix shares closed at $1,153.32 on Oct. 3, down 0.79% for the day. After-hours trading saw a small rise. That week, the stock hit a low of $1,143.43 and a high of $1,168.90, which showed how unstable it was because of the cultural controversy.
Still, experts say that a few days of losses don’t mean that a trend is starting. Shareholders should be more concerned about whether these kinds of things could cause long-term subscriber loss, especially in domestic markets where people are very sensitive about entertainment content.
Investor risk: Red states, ESG, and corporate silence
Netflix has subscribers all over the world, but it still relies a lot on U.S. customers. About 70% of Netflix members live outside of the U.S. and Canada, but UCAN still brings in about 45% of revenue because it has the highest ARPU.
Growth is happening all over the world, yet the dollars remain U.S.-weighted. If conservative families join the boycott movement, it could mean a real, though hard to measure, risk of losing customers.
But there is a bigger problem here: how companies deal with public debate that divides people.
Netflix hasn’t said anything yet, and they haven’t talked to Musk or his supporters directly. That plan might be smart; responding could make things worse.
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But it also lets critics control the story, and investors are left wondering how leadership thinks about reputational risk.
At the same time, the ESG front is getting more and more pressure. At one point, fund managers praised Netflix’s forward-thinking brand identity. Some of those same investors are now thinking about how much they want to invest in “culture war stocks” because of political pushback.
In this environment, silence is not always neutral. It can be perceived as either strategic or fearful. Both interpretations have consequences.
Meanwhile, Netflix pushes ahead with strategic initiatives
Netflix is sticking to its business plan, despite the cultural turmoil. The company is making big bets on a number of long-term projects:
- AI investment: Netflix has posted high-paying roles — some offering up to $700,000 — focused on building generative AI tools for advertising and internal operations.
- Physical expansion: “Netflix House,” a new concept for immersive fan venues, is launching in Dallas and Philadelphia in 2025, with Las Vegas on deck for 2027.
- Content pipeline: October brought new seasons of “Love Is Blind,” “The Diplomat,” and the launch of “Genie, Make a Wish,” a Korean fantasy-romance.
- Franchise growth: “KPop Demon Hunters,” an original animated film, broke viewing records and spawned a theatrical singalong version.
- Talent partnerships: Netflix continues working with big names like Ms. Rachel, even as deals like its high-profile pact with Prince Harry and Meghan Markle appear to be winding down.
Even despite everything going on, the machine keeps running. For now, Netflix seems to want its content and new ideas to speak louder than its critics.
Financial check-in: What the Netflix numbers say
Netflix’s most recent earnings report shows strong fundamentals, despite cultural turbulence. In Q2 2025, the company reported:
- Revenue: $11.08B, up about 16% year over year
- Operating income/margin: $3.78B at 34.1% margin (vs. 27.2% a year ago)
- Net income: $3.13B
- Free cash flow: Approx. $2.27B (Q2)
- Guidance update: FY2025 revenue raised to $44.8 to $45.2B; FY operating margin to about 30% (reported)
The Asia-Pacific and Latin American markets are still growing, which is helping to balance the lack of growth in North America.
Netflix will report its third-quarter results on Sept. 15. Analysts will be paying close attention to subscriber trends and what management has to say about content strategy and risk exposure.
The bigger picture for Netflix: Brand, pricing power, and staying power
Brand perception tends to stay the same, even when there are problems. The longer-term risk for Netflix isn’t whether a canceled show causes a backlash; it’s whether enough of those moments hurt pricing power, brand equity, or retention among core segments.
There hasn’t been any sign of a mass subscriber exodus yet.
But in today’s economy of attention, how people see things can change faster than how well they work. Netflix is known for being a cultural powerhouse, but in today’s political climate, that power comes with a price.
How the company handles that balancing act — quietly or openly — will affect both its story and its numbers in the coming quarters.
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