View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Business
7 December 2012

Five questions answered on Netflix’s Facebook “violation“

Digested.

By Heidi Vella

Netflix Inc’s chief executive Reed Hastings is in trouble with the US Securities and Exchange Commission (SEC) because of something he posted on Facebook. We answer five questions on his controversial post.

What did Hastings say?

On 3 July Hastings announced on a public Netflicks Facebook page accessible to 244,000 subscribers that one billion hours of video was being viewed a month by members of the video streaming website. 

He said exactly: “Netflix monthly viewing exceeded 1 billion hours for the first time ever in June.”

So, what’s the problem with this post exactly?

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

The way the information was disclosed is the problem. The SEC believes that this particular figure is material information and therefore should have been disclosed in a press release or regulatory filing.

SEC’s Regulation FD, adopted in 2000, requires public companies to make full and fair public disclosure of material non-public information.

What kind of action is the SEC taking?

The “Wells notice,” as it is known as, that was received by Netflicks and filed by the company as regulations dictate, states that the SEC is planning on bringing civil action against the company because of the post made by Hastings.

The SEC staff will recommend the full commission pursue either a cease-and-desist action and/ or civil injunction against Netflix and Hastings.

What has Hasting said about his contentious Facebook posting?

According to The Telegraph, Hasting said yesterday that his posting was public enough: “First, we think posting to over 200,000 people is very public, especially because many of my subscribers are reporters and bloggers,” 

In a letter posted alongside the regulatory filing he added “We remain optimistic this can be cleared up quickly through the SEC’s review process.” 

What are other people saying?

Wedbush Securities analyst Michael Pachter told Reuters: “It’s totally disingenuous to say that his statement wasn’t material when the stock went from under $70 a share to more than $80 and the only data point was that post.”

While, Joseph Grundfest, former SEC commissioner and Stanford Law School professor also told Reuters: “The evolution of social media presents the SEC with some very interesting regulatory challenges. But if they’re worried about social media, there are ways for them to address that without threatening to sue Reed Hastings. They should have a rulemaking where they can ventilate these issues. “

Content from our partners
The promise of prevention
How Labour hopes to make the UK a leader in green energy
Is now the time to rethink health and care for older people? With Age UK

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU