Five questions answered on Netflix's Facebook "violation"

Digested.

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?

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. "

Netflix is in trouble. Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

Getty
Show Hide image

Theresa May’s stage-managed election campaign keeps the public at bay

Jeremy Corbyn’s approach may be chaotic, but at least it’s more authentic.

The worst part about running an election campaign for a politician? Having to meet the general public. Those ordinary folk can be a tricky lot, with their lack of regard for being on-message, and their pesky real-life concerns.

But it looks like Theresa May has decided to avoid this inconvenience altogether during this snap general election campaign, as it turns out her visit to Leeds last night was so stage-managed that she barely had to face the public.

Accusations have been whizzing around online that at a campaign event at the Shine building in Leeds, the Prime Minister spoke to a room full of guests invited by the party, rather than local people or people who work in the building’s office space.

The Telegraph’s Chris Hope tweeted a picture of the room in which May was addressing her audience yesterday evening a little before 7pm. He pointed out that, being in Leeds, she was in “Labour territory”:

But a few locals who spied this picture online claimed that the audience did not look like who you’d expect to see congregated at Shine – a grade II-listed Victorian school that has been renovated into a community project housing office space and meeting rooms.

“Ask why she didn’t meet any of the people at the business who work in that beautiful building. Everyone there was an invite-only Tory,” tweeted Rik Kendell, a Leeds-based developer and designer who says he works in the Shine building. “She didn’t arrive until we’d all left for the day. Everyone in the building past 6pm was invite-only . . . They seemed to seek out the most clinical corner for their PR photos. Such a beautiful building to work in.”

Other tweeters also found the snapshot jarring:

Shine’s founders have pointed out that they didn’t host or invite Theresa May – rather the party hired out the space for a private event: “All visitors pay for meeting space in Shine and we do not seek out, bid for, or otherwise host any political parties,” wrote managing director Dawn O'Keefe. The guestlist was not down to Shine, but to the Tory party.

The audience consisted of journalists and around 150 Tory activists, according to the Guardian. This was instead of employees from the 16 offices housed in the building. I have asked the Conservative Party for clarification of who was in the audience and whether it was invite-only and am awaiting its response.

Jeremy Corbyn accused May of “hiding from the public”, and local Labour MP Richard Burgon commented that, “like a medieval monarch, she simply briefly relocated her travelling court of admirers to town and then moved on without so much as a nod to the people she considers to be her lowly subjects”.

But it doesn’t look like the Tories’ painstaking stage-management is a fool-proof plan. Having uniform audiences of the party faithful on the campaign trail seems to be confusing the Prime Minister somewhat. During a visit to a (rather sparsely populated) factory in Clay Cross, Derbyshire, yesterday, she appeared to forget where exactly on the campaign trail she was:

The management of Corbyn’s campaign has also resulted in gaffes – but for opposite reasons. A slightly more chaotic approach has led to him facing the wrong way, with his back to the cameras.

Corbyn’s blunder is born out of his instinct to address the crowd rather than the cameras – May’s problem is the other way round. Both, however, seem far more comfortable talking to the party faithful, even if they are venturing out of safe seat territory.

Anoosh Chakelian is senior writer at the New Statesman.

0800 7318496