De-territorialized digital capitalism and the predicament of the nation-state: Netflix in Arabia

Abstract

In 2018, Saudi Arabia and Netflix were forced to confront the limits of freedom of speech online. The kingdom requested that the streaming giant remove a critical episode of the satirical show Patriot Act with Hassan Minhaj from its local service, and the latter complied at the risk of reputational damage. Focusing on the controversy surrounding this case, this article explores how both state and business adopt and adapt to changes in technology and how each reasserts its sphere of influence in the digital era. We argue that state and business are developing a symbiotic relationship in the context of de-territorialized digital capitalism. Such a relationship allows both entities to engage in mutual interdependence that accommodates the interests of the other while avoiding harmful consequences and deleterious effects. In practice, the state exercises targeted censorship while businesses abide by controlled compliance. The account and analysis presented regarding the logic of symbiotic relationship draws attention to the various ways in which global media players in the digital era have navigated territoriality and the extent of state–business mutual accommodation.

Keywords

censorship de-territorialization digital capitalism Middle East nation-state Netflix Saudi Arabia SVoD

In December 2018, the kingdom of Saudi Arabia and the global streaming company Netflix were forced to confront the limits of freedom of speech in the digital era. At the center of this incident was the satirical show Patriot Act with Hassan Minhaj. In one episode, Minhaj blasted the Saudis, criticizing its crown prince for the kingdom’s role in the killing of prominent journalist and vocal critic Jamal Khashoggi at the Saudi consulate in Istanbul, taking them to task for the devastating war in Yemen, and deplorable crackdowns on women’s rights advocates – all of which attracted public outcry and wide criticism (Patriot Act, 2018). In response, Saudi Arabia’s Communications and Information Technology Commission requested the episode be removed because it violated the kingdom’s anti-cybercrime laws, which criminalize the production and transmission of digital material impinging on the monarchy’s religious values and public morals.

Commenting on the incident, Robin Wright (2019) wrote in the New Yorker that the case ‘reflects the growing tensions between global internet platforms that erase borders and autocratic governments with the money or legal muscle to restrict freedom within the borders they rule’. Such depiction, however, does not accurately reflect the dynamics at work in this case. In fact, there was hardly any real ‘tension’ as Netflix readily complied with the Saudi request to pull the episode from access in the kingdom. Whatever contention the controversial episode sparked ended up being resolved within what may be described as a symbiotic relationship.

Characterizing this relationship are seemingly irreconcilable dynamics. While continuing to practice various forms of censorship and control, Saudi Arabia attempts to project an image of a progressive state that is bent on reforming itself. Similarly, Netflix is able to uphold progressive American values while complying with restrictive policies. As streaming companies like Netflix proliferate across national borders, sociocultural contexts, and political economies, and attract more local audiences, a symbiotic relationship is developing between state and business that is transforming the way stakeholders engage with controversial content. Using the controversy surrounding Patriot Act as a case study, this article explores how both state and business adopt and adapt to changes in technology and how each reasserts its sphere of influence in the digital era. It sheds light on the intricate relationship between Saudi Arabia, a conservative country that claims to be on a path for change, and Netflix, the world’s leading streaming entertainment service. These dynamics unfold within changing technological affordances, altered consumer behavior, and subversive practices on the part of both consumers/audiences and artists/media personalities. Capturing these intricate dynamics in their full complexity is contingent on addressing pertinent questions about the conditions of global digital capitalism, de-territorialized content, and the reconfigured relationship between state and business in the Global South.

From print and electronic capitalism to de-territorialized digital capitalism

The adoption of new information technologies and the intensification of communication have been a constant challenge to Middle Eastern states which, traditionally, have exerted a strong control over the media sphere. From print journalism and radio broadcasting to satellite broadcasting and now digital streaming, states throughout the region have exerted various forms of control that came to be folded into a number of interconnected practices and overlapping logics, which are tied to media sovereignty, economic interdependence, and sociocultural protectionism. In the case of Saudi Arabia, these dynamics intersect in complex ways considering the kingdom’s traditional dual strategy of developing an open transnational media system abroad, which reinforces its regional standing, while operating a state-controlled domestic media system, which upholds its cultural sensibility.

With the establishment of modern Middle Eastern states, the logic of media sovereignty governed state investments in media technologies as tools for asserting national identity and exerting power internally and externally (Kraidy and Khalil, 2010). Linked to state sovereignty and national security, the telecommunications sector (initially telephony and broadcast, and later satellite and Internet) has traditionally been the purview of the state. Since the 1960s, Saudi Arabia has invested heavily in broadcast technologies and offered content that counters foreign propaganda, primarily from Egypt (Boyd, 1999). In the 1970s, they adopted satellite technologies to broadcast prayers from Mecca, thus reasserting the kingdom’s religious authority. The satellite era posed additional challenges with news, information, and programs crossing borders with hundreds of free channels available to audiences across the region (Sakr, 2009). Initially, Saudi Arabia attempted to control the onslaught of satellite television by putting restrictions on satellite ownership, only to realize that the tide was unstoppable. As a result, the state had to accommodate satellite technologies and tolerate some form of deregulation and economic liberalization (Kraidy and Khalil, 2010).

The logic of economic interdependence allowed the state to move from its monopolistic ownership of media technologies to a system of clientelism. Yielding to forces of globalization, media licenses were granted on the bases of political loyalty and regime support in places like Egypt, Lebanon, and Tunisia (Guaaybess, 2013). Starting in the 1980s, Saudi Arabia encouraged and supported the private sector’s use of satellite technology to deliver Saudi-funded newspapers to printing presses around the world, and to establish private television channels in London and Rome and broadcast programs across the Middle East and North Africa (MENA) region. Balancing state media sovereignty with national interests, Saudi media conglomerates such as Arab Radio and Television, MBC Group, and Rotana were headquartered in the kingdom but operated and broadcast from European and other Arab capitals. In addition to supporting loyalist private media entities, including those offshore, Saudi Arabia sought to control the means of production and use proxies to build an international media empire. Since its establishment in 1996, the Qatar-based Al Jazeera news channel served as a platform for oppositional views, including those of Saudi dissidents (Zayani, 2005). In return, the kingdom imposed a de facto Saudi ban on advertising on Al Jazeera, while assembling a group of state and private entrepreneurs to establish the competing news channel, Al Arabiya. Funded by the state, the latter operated as a part of the private network MBC Group before being folded into the Saudi state international media portfolio.

Using the logic of sociocultural norms, the state reasserted its authority as the purveyor of morality within society by extending its control over media content beyond the realm of traditional political speech. With religion being the most common defining marker of culture, the state freely interprets, censors, or bans (Kraidy, 2013). Cultural exceptionalism is often invoked as a rationale for banning content that may negatively portray local culture or display alternative social norms. Consider the case of the first digital broadcaster in the Arab region, Orbit, which established the Arabic version of BBC in 1994. While the broadcast of a Panorama documentary deemed offensive to the royal Saudi family offered the official pretext, a series of uncontrolled and uncensored political debates added impetus to the dismantling of the channel. Using a legal clause related to BBC’s failure to respect ‘cultural sensitivities’, Orbit canceled its contract with the channel and retained control over the purposefully developed newsroom management system, thus preventing BBC Arabic from broadcasting until 2008 (Sakr, 2009).

These logics have governed the media–state relationship during the two phases of what Anderson (1991) calls ‘print capitalism’ and Appadurai (1996) conceives more broadly as ‘electronic capitalism’. For Anderson (1991), the economic activities associated with the demand for print media (especially versions of the bible in local languages) came to define ‘print capitalism’. The printing presses promoted nationalism and thus fostered the idea of modern nation-states; similarly, establishing a news agency, newspaper, or radio station came to define modern Arab states, as was the case with Nasser’s Egypt. For Appadurai (1996), the images and representations globally promoted by film, broadcast media, and the early Internet are the outcome of ‘electronic capitalism’. Under this form, identities and communities are developed around media and representations constructed in distant time and space. The emergence of pan-Arab identities around Sawt al Arab (from Cairo), Al Jazeera news channel (from Qatar), or television series (from Turkey by way of dubbing in Syria) are all indicative of electronic capitalism’s ability to bring together state interests and business opportunities with production and consumption patterns (Khalil, 2015).

Along this line of analysis, we use digital capitalism to reflect on what Schiller (2000) calls an epoch in which digital media forms are ‘the central production and control apparatus of an increasingly supranational market system’ (xiv). While the battle to control signals predates the digital, the latter created unprecedented challenges for states. In much the same way states in the Middle East sought to control radio and TV, they have attempted to control the digital flow of information. Within global digital capitalism, the growth of digital platforms is increasingly dependent on the concentration of production, distribution, and storage in a few companies, and the ability of nation-states to retain their political, cultural, and economic sovereignty. Fuchs (2013) advances the concept of transnational informational capitalism, arguing that the tools of production, the commodities, and the labor style are intertwined with information technologies. Schiller (2000) offers a view of digital capitalism that recognizes continuities in capitalistic principles of exchange and social organization, while Mosco (2009) recognizes the need to acknowledge processes and forces that are dynamic and in constant motion. These considerations are important to bear in mind when tracing processes of global digital capitalism in the context of a relationship in which Saudi Arabia is increasingly integrated in a supranational, digital, market of which Netflix is a prime producer.

Early studies of the relationship between the state and technologies, particularly the Internet, argue for a diminishing role of the state (Ferdinand, 2000; Jordan, 1999; Sklair, 2002). Others, such as Birnhack and Elkin-Koren (2003), suggest that the state took advantage of its functions to enforce cyberlaws, regulate economic activities, and defend social norms. For critics such as Mueller (2013), these arguments, which smack of ‘cyber-libertarianism’, are simplistic and ignore the sociocultural, political, and technical factors that impact the adoption of digital technologies. They also assume that the increase in digitality would eventually render the state powerless. If anything, the advent of the Internet era has entailed the rise of ‘cyber-conservatism’, which points to the state’s ability to harness these same technologies to continue and sustain its position in the digital age.

Significantly, the case of the digital Middle East is more complicated than Mueller’s binary formulations imply, precisely because it includes disconnected stands and conflictual pulls whereby the state develops its relationship to digital technologies in paradoxical ways, using them simultaneously as tools for both modernization and control. On one hand, the state is keen on adopting new technologies in pursuit of socioeconomic development; it funds infrastructure, encourages training, attracts investments, and promotes and defends various processes of integration in the digital age. On the other hand, the state is bent on taming these technologies and appropriating them to serve its own interests; to that end, it adopts cybercrime laws, creates cyber agencies, practices various forms of preemptive bans and routinized digital surveillance, and sanctions online activities and speech.

These dynamics have to be understood within an evolving context that transcends the state – namely, the advent of digital capitalism, which in turn is associated with a host of changes that lie at the intersection of global trends and regional realities reflected in recent critical work (Hudson and Zimmermann, 2015; Punathambekar and Mohan, 2019). These developments include the following:

Change in the level of infrastructural independence, as states – previously the sole investors in technologies – become more reliant on private, often international, partnerships and foreign investments, making them merely a node in a global interconnected system that is multi-sited, hybrid, and with dissipated membership;

Change relating to the intensification of data (signals and flows) and networks that are increasingly less tangible;

Change in the way the relationship with media operates as a result of digital convergence, which has increased the fluidity of trans-border communication;

Change in commodification patterns and consumption habits with the rise of ‘produsers’, binge-watching, and digital advertising;

Change in the nature of content, whereby novel genres combine news commentary and entertainment;

Change from nationally/regionally based media companies to global media operations.

As a result of these wide-ranging changes, states are confronted with the increasing popularity of global media companies whose content is available across national borders, while technology platforms and digital entertainment companies are becoming cognizant of the need to recognize restrictions and accommodate positions of individual nation-states.

Capturing the complexities associated with the Middle East’s foray into the digital era requires attention to the reconfigurations of de-territorialized digital capitalism beyond the focus on micro-practices (Herrera and Sakr, 2014), digital activism (Wheeler, 2017), and digital cultures (El-Ariss, 2019). Seen through the lens of Deleuze and Guattari’s work, the state and business under digital capitalism are locked in a fluid process of territorialization and de-territorialization. On one level, the basis for the nation-state’s assertion of power in the political, economic, and sociocultural spheres revolves around spatial sovereignty, territoriality, or territorialization. Similarly, Internet distribution has increased global circulation but has also led to increased territorialization by creating limited territories for consumption (e.g. via geoblocking) (Lobato, 2019). On another level, these processes are also understood in terms of supranational rounds of capital accumulation lead by companies like Netflix, whose operations, services, and products are de-territorialized. Similarly, states like Saudi Arabia are bound by globalization pressures and flows, which are often associated with de-territorialization. It is on these two levels, the territorial and de-territorial, that state and business are developing their relationship in the context of de-territorialized digital capitalism.

In principle, Netflix is subject to nation-state control as its global venture rests on its disposition to negotiate licenses, tailor content, and attract consumers based on their territorial presences. Yet, such global tech companies are also apprehensive toward individual countries’ laws and tend to promote free-market approaches of self-regulation. In practice, such companies adhere to global standards often anchored in US policies toward cultural expressions. While promoted as universal, the standards often clash with local norms, values, and traditions. Therefore, such global companies and their products are de-territorialized, but they are also territorialized because they are subject to local realities and contexts. The dynamics and challenges associated with de-territorialized digital capitalism merit real attention.

The BlackBerry controversy

Prior to the age of the large-screen smartphone and before the phenomenal dominance of Android and Apple, BlackBerry – made by the Canadian tech giant Research in Motion (RIM) – was a successful smartphone that ushered the rise of social media platforms. BlackBerry was a preferred business device and many companies adopted it because of its security, reliability, and functionality, while its messenger service BBM, which enabled text-based instant messaging was particularly popular among young users (Savov, 2016). The relationship between RIM and Gulf countries like UAE and Saudi Arabia took an unexpected turn in 2010: Citing the company’s failure to comply with their telecommunication regulatory frameworks, these countries announced that they would suspend BlackBerry mobile services, particularly data applications like BBM.

The ban highlights national security concerns over the state’s inability to access information and monitor tightly encrypted messages and traffic on BlackBerries. The Canadian smartphone company has a unique security configuration; it provides a secure messenger service that encrypts data and routes communication through foreign-based servers, making it both unintelligible and out of reach. For Middle Eastern countries that consider BlackBerry communication ‘too secure’ (Graham, 2010), such configuration raises questions about legal ownership and control of cyber information that defies geographical boundaries.

The ban was eventually averted as RIM reached an undisclosed agreement with these Gulf states that gives them access to and greater control over users’ data – presumably less so in the corporate than the consumer market, considering the lower level of security in the latter. In order to continue to operate, BlackBerry had to relent to these states’ demands for compliance. According to some reports (The Guardian, 2010), the compromise entailed placing a BlackBerry server locally to enable Gulf states to monitor messages and have some control over the data. Notwithstanding the eclipse of BlackBerry, the case highlights two key issues that will recur with the intensification of digital capitalism and the emergence of new digital players. From a business end, it shows how the expansion of global information and communications technology (ICT) companies into fast-growing, emerging markets is bound to spawn regulatory challenges (The Guardian, 2010); from a state perspective, it reveals the extent to which states are willing to go to retain control over telecommunications (Aljazeera, 2010).

In subsequent years, Middle East states exerted measured control over and intermittent disruption of services and apps for proclaimed security considerations or obvious economic motivation. This is the case with the periodic bans on Voice over Internet Protocol (VoIP) from Skype to WhatsApp and from Facetime to Imo. Increasingly, states are demanding access to various forms of secure communication from popular communication platforms. When the owners of these platforms refuse to comply, the authorities revert to traditional censorship practices. For example, in 2015, Iran blocked the mobile app Telegram, which offers end-to-end encrypted text conversations, after it reportedly refused to provide the Iranian Ministry of ICT with spying and censorship tools (Cox, 2016b). Similarly, in 2017, Egypt blocked the encrypted messaging app Signal (Cox, 2016b).

Significantly, restriction on digital communication tools is often impelled by the need to safeguard economic interest. It is not uncommon for states to impose restrictions and exert economic pressure on tech players and global telecom companies that have a market share in their countries and could jeopardize the financial interests of clientelistic networks and undermine the state’s ability to exert its control over the telecommunication sector. In Gulf countries, where there is a sizable expatriate workforce, banning voice and video-calling services shores up the demand for international calls, which plays in the hands of the leading communication providers and by extension national governments and their local business allies who are stakeholders in the lucrative telecommunication market (Radcliff, 2017).

These practices highlight the dilemma that comes with juggling two disparate imperatives: desiring to play a technological leadership role in the region while heeding security challenges and political instability. Unlike pirated CDs, cards, and signals which were limited in circulation and deemed illegal, access to data flows are sanctioned by the state, in line with national modernization goals, and encouraged as part of entering the digital age. Legacy media was more easily controllable: ban audio and video cassette tapes, censor newspapers, impose restrictions on the installation of satellite dishes, and monitor Internet servers. Not so much with global tech companies and streaming services like Netflix, which lure regional customers with their content; these companies are not bound by the laws of these countries, and they resist compliance, champion artistic freedom, and advocate global standards for digital content accessibility. The case of Netflix in Arabia is all the more interesting because it epitomizes the complex interlinkage between national security priorities, business imperatives, moral and cultural considerations, international trade negotiations, and business strategies.

Netflix in Arabia

Founded in 1997, the US streaming company Netflix grew from a startup to become a global tech giant commanding a total net income of over US$1.21 billion and more than 140 million subscribers in 2018 (Watson, 2020b). The brilliance of Netflix rests in its multiple strategies to manage its streaming library using a sophisticated algorithm to buy, develop, and distribute content to targeted audiences. In a relatively short period of time, Netflix built on existing business models from movie studios to pay TV, exploited the affordances of data-driven narrowcasting, and ultimately altered the way media is consumed. From binge-watching, to must-watch, must-complete content, Netflix has also entered the realm of everyday life, particularly that of young demographics.

As part of its global expansion, Netflix entered the Arab world in 2016. Initially, the streaming company suffered from the specifics of the market, which include high television penetration, rampant piracy of film and television content, economic disparities, a significant digital divide, and disparate credit-card penetration rates. However, a sizable young demographic attuned to online video content and receding viewership of satellite television (both free-to-air and Pay-TV) (Northwestern University in Qatar, 2019) increased the demand for streaming services and managed to acquire a strong foothold in the market. Its subscription rate has been steadily increasing along with its competitors, which include local ‘catch-up’ TV players such as MBC Group’s Shahid.net, Pay-TV supplemental players such as OSN’s Wavo, and international streaming players such as STARZ Play Arabia. In the region, Netflix remains the leader in subscription video on demand (SVoD) with 27%, followed by STARZ Play Arabia at 10% (Digital TV Research, 2019). Between 2017 and 2019, SVoD services have more than doubled their revenues in Saudi Arabia, from US$50 million to US$116 million, making Saudi customers regional leaders in both subscription and proceeds (Digital TV Research, 2019). Given its developed digital infrastructure, Saudi Arabia, together with the rest of the Gulf Cooperation Council (GCC), forms the largest share of the total MENA revenue for Netflix. Saudi Arabia alone is estimated to have over half of the subscribers in the MENA region (2.11 of 4.13 million total subscribers) (Digital TV Research, 2019). According to Statista.com, of the company’s annual US$15.8 billion revenue in 2018, US$3.2 million came from the kingdom (Watson, 2020a, 2020c). Although Netflix’s expansion faces challenges from other global SVoD competitors, particularly with the prospects of Disney and Apple entering the regional market, as well as from traditional piracy as its content is made available on DVDs and illegal sites, it remains the leading player in SVoD.

Netflix is a noteworthy case because – unlike BlackBerry’s – it brings us back to traditional audiovisual content. Prior to the emergence of streaming platforms, television developed around and catered to either the state or business and advertisers. With streaming, content is neither produced for the state nor for advertisers; it is sold directly to audiences, which is tantamount to saying that the value is henceforth in the content itself. The logic of the television industry evolved from one based on advertising and state subsidies to the ‘direct commodification’ model (Mosco, 2009). What this effectively means is that neither governments nor businesses have direct sway over them.

Inevitably, Netflix meshed with these evolving practices in the Middle East in its drive to territorialize. As an elusive media player epitomizing digital capitalism and thriving on flows that seem to defy nation-states, Netflix has alarmed many a Middle East state. The popularity of this platform calls for state attention, particularly when culture and politics are at stake. Responses to the challenges emanating from the free flow of content on these platforms ranged from preemptive legalized control, as in the case of Turkey (Soylu, 2019), to reactive blunt censorship, as in the case of Saudi Arabia.

A despised Patriot Act

Under the leadership of Crown Prince Mohamad Bin Salman, Saudi Arabia has embarked on large modernizing project dubbed Vision 2030. This pursuit engendered two irreconcilable orientations. On one hand, the state is enacting socioeconomic reforms and echoing young people’s aspirations for fewer social restrictions and more jobs. On the other, it wants to determine the beneficiaries from these transformations and remain in control of the speed, level, and areas of such reforms. Since 2017, the role of national and global media has been instrumental in the promotion and execution of this vision. National media, both state and private, has been consolidated under the state’s full or partial ownership and control. International media has been seduced with exclusive interviews, sponsorships, and public relations campaigns (Diwan, 2018; Friedman, 2017; Jacinto, 2018). The Saudi investment in capital-intensive transnational media over the past few decades proved vital in consolidating the kingdom’s media presence and influence in the MENA region. With the advent of the digital era, the Saudis intensified their pro-business approach to exert control over the media. For example, major productions were powered into Shahed.com (a regional streaming platform) and the MBC studios (a global content producer).

Building on its enormous footprint in the United States, the streaming giant Netflix expanded globally including into the Middle East in 2016. Its regional audience of more than three million subscribers was quickly seduced by its prestige dramas (House of Cards (2013–), re-runs (Friends (1994–2004)), and superhero franchise (Jessica Jones (2015–)). With mobile penetration of 129% of the total population, young Saudis spend more than 3 hours a day on online videos (Watson, 2019). While the Saudis are globally the biggest users per capita of YouTube, they have gradually adopted Netflix and other streaming platforms (Global Media Insights, 2019). According to a 2019 report, Netflix is the most in-demand platform (62%) for digital originals in Saudi Arabia (Puri-Mirza, 2019). Netflix quickly managed to integrate into the everyday lives of young Saudis, who are no strangers to online entertainment.

Expectedly, Netflix was tolerated in the kingdom until the latter became the subject of its ridicule. What was riling about Minhaj’s critical episode of Patriot Act was the charged political valence and overtly critical nature of the message, which turned it into an act of ‘political jamming’ (Cammaerts, 2007) at a time of increased pressure on Saudi Arabia. For the Saudi establishment, Minhaj’s defaming the kingdom and disparaging the royal family amounted to a case of lèse-majesté.

Media comedy and satirical shows are not new to the kingdom, but they have largely been homegrown and, as such, bound by red lines. In a country with severe restrictions on freedom of speech, the genre of satirical media shows thrived within limits. One such show is Tash Ma Tash (Fizz or Not) (1993–2011), a satirical-comedy TV series that became a Saudi sensation for its humor but also its rare social criticism. The show offered a substantive treatment of various contentious issues, addressing women’s status, the problems of the public sector, and religious extremism. Expectedly, there have been many calls to ban the show. Religious authorities criticized it for ridiculing religion and ‘damaging social cohesiveness’. The show has even become the subject of religious edict, complaints from Saudi officials, and even censorship by Saudi television (Kraidy and Khalil, 2010; Jaafar, 2008). Such pressures have kept Tash Ma Tash – and subsequently the even more daring MBC satirical spinoff series Selfie, which caused a stir by mocking ultra conservatives and satirizing beheadings by the Islamic State (Gani, 2015) – in check, flirting with red lines, but not quite crossing them. Although not necessarily state initiated, these forms of homegrown satire broadcast on Saudi national and transnational media allow for the circulation of alternative discourses while brooking no dissent.

As Saudi Arabia became increasingly wired, these media genres migrated to the Internet to unleash the creativity of a connected young generation. The advent of Web 2.0 in the mid-2000s gave rise to a wealth of online forms of entertainment while state-imposed restrictions on Saudi society created a captive audience of social media content. Young Saudis sought to establish their own YouTube channels, producing monologues, songs, and sketches addressing social issues through humor. Particularly noteworthy is the appeal of locally produced YouTube satirical shows like 3al6ayer (On the Fly) and La’yekhtar (Zip It) that challenge taboos while creatively navigating restrictions (Jawdat, 2014). The explosion of online content on the social web, from news to satire, prompted a reaction as the state moved toward tighter regulation of video content produced in the country (Jones and Al Omran, 2014). In 2018, Saudi Arabia went beyond existing provisions in its anti-cybercrime laws to make satire on social media a punishable offense equally for those who produce it and distribute it – following the logic of sociocultural norms (BBC.com, 2018). While a stern reminder of the perils of crossing red lines, these restrictions have not bridled the creative talent of many young Saudi YouTubers, who simply grew more adept at evading censorship and coding their messages (Murphy, 2014).

Keeping in check home-produced satire (both online and offline) is one thing; dealing with critical foreign shows that are streamed on a global platform over which the kingdom had no control is quite another. The Saudis were as taken aback by the message as by the messenger-comedian – a Muslim-American of Indian origin and a self-proclaimed ‘Muslim savior’ who takes a dig at the seat of Islam and gets away with it. For one commentator, Minhaj offers ‘a charismatic face for the word “Muslim” to counter xenophobia in America’ (Wright, 2019), thus preempting potential criticism of the show Orientalizing Gulf monarchies, stereotyping Muslims, or being religiously and culturally insensitive. Minhaj capitalizes on this element to expose the Saudis’ overreaction: ‘Of all the Netflix originals, the only show that Saudi Arabia thinks violates Muslim values [and necessitates a Muslim ban] is the one hosted by a Muslim’ (Minhaj, 2019). He even revels at the thought that he has an advantage over Saudi comedians and even dissidents: ‘So while I can make a joke about being a cybercriminal, this is no joke for many Saudi activists’ (Schaffstall, 2019).

The logic of symbiotic relationship

Operating at the legal request of the Saudi Communications and Information Technology Commission, Netflix complied in removing the content – though the episode remained accessible on multiple legal and illegal platforms both inside and outside the kingdom. Netflix’s decision was followed by harsh warning from the Saudi public prosecutor to producers and distributors of satirical content online. Significantly, while having a deterrent effect at the national level, these measures did little to block undesired content flowing in from abroad. At the level of implementation, the inadequacy of national censorship laws in dealing with global tech companies disarmed the Saudis, leaving them scrambling for a plausible solution.

Considering that the Saudis’ stern cyber-content laws were unenforceable and that Netflix willingly withdrew the controversial content, the case points to the larger question of state regulation of omnipresent global streaming platforms in the digital era. Minhaj surmised the significance of the issue well: ‘It’s about the precedent, because as tech companies keep expanding, they’re gonna keep running into more vague censorship laws. Laws that can allow governments to pull any content at any time’ (Kreps, 2019).

These disjunctions are hardly surprising, considering the nature of Netflix and the logics of digital capitalism. Operating at the intersection of the global and the local necessitated a degree of adaptability for the global streaming company. In pursuit of its internationalization strategy, Netflix expanded to 190 countries in 2016 with offices and subsidiaries in countries such as the Netherlands, Germany, Luxembourg, Brazil, India, Japan, South Korea, and Singapore. It manages the MENA region from the Netherlands, and NetflixMENA is present online and promotes its programs across social media platforms. In pursuit of its localization strategy, Netflix devised solutions for licensing, digital-rights management, regional servers, and geoblocking. In its effort to expand, Netflix followed a dual strategy of buying existing entertainment programs and then marketing them as popular and trending Netflix shows (such as the Lebanese drama, Al Hayba (2017–)) or developing original programs branded as Netflix originals (such as the Jordanian teenage drama series, Jinn (2019–)).

The dual global-local orientation of Netflix is important when considering how the streaming company chose to proceed in the Saudi kingdom. Faced with the Saudis’ apprehension and the risk of a deadlock that could ultimately sever the relationship, as well as the looming prospect of banning, Netflix had three options: (1) champion freedom of speech, refuse to follow the ‘law’, and risk being banned (as with Facebook), (2) pull its platform and lose audiences to competition (as with Google and Baidu), or (3) give in to censorship of objectionable content and be criticized for it. At the request of the Saudis, Netflix agreed to ‘comply with local law’ and to drop the controversial episode, which enabled it to continue to operate seamlessly in the kingdom – where 50% of its MENA (affluent) subscribers reside. Unlike practices associated with older distribution platforms (whereby companies produce shows that appeal to the consumer), in the new modus operandi, the program itself is the product. In the old formula, a controversial TV program is a liability that risks scaring off advertisers; in today’s digital context, voluntary compliance is a strategic business tactic. For Netflix, not pulling an undesired satirical program like the controversial Patriot Act episode risks endangering its operations, having the entire platform banned in the kingdom, and losing a lucrative market. Thus, acting on the basis of what was deemed ‘a valid legal request’ (The National, 2019) enabled Netflix to walk a thin line between ‘(self-)censorship’ and ‘legal compliance with local laws’.

The arrangement also served the Saudis well, conveniently enabling them to ‘sanitize’ Netflix from undesired political content even while claiming to be modernizing and opening up to the world. Interestingly, the kingdom’s sensitivity did not extend to cultural content on Netflix – content that typically reflects Western norms that often acquire the status of common values in spite of sometimes being incompatible with local values or not reflecting cultural specificities. A plethora of entertainment programs on Netflix often show nudity, flaunt permissiveness, and promote alternative lifestyles – yet remain legally streamed in spite of being at odds with the cultural morals and legal provisions of the kingdom. Evidently, this is a compromise on the part of Saudis, who are willing to tolerate the liberal aspects of Netflix as long as it steers clear of the internal affairs of kingdom. For its part, the US streaming giant agrees to censor sensitive political content as long as the Saudis continue to tolerate other programs that may raise cultural sensitivities. Culture and cultural exceptionalism are thus conveniently reduced to the straight and narrow of the region’s political culture, enabling the kingdom to claim making an overture even as it stifles free speech.

The resolution of this case reveals a symbiotic relationship between state interests and corporate interests; targeted censorship as a state tactic and controlled compliance as a business tactic. A symbiotic relationship assumes a cooperative situation whereby the return derived from such an arrangement exceeds the return achieved without it. Such relationship allows both parties to engage in mutual interdependence that accommodates the interests of both while avoiding harmful consequences and deleterious effects. In the case at hand, a symbiotic relationship of mutual accommodation developed whereby the global streaming company gains access to subscribers/audiences in exchange for loosening expectations about upholding unfettered speech and supporting artistic freedom, while the state reclaims its authority over its national digital space without needing to resort to traditional repressive methods or excessive measures that would draw negative publicity. While the kingdom reasserts its digital-state sovereignty and safeguards its political culture, the corporation continues to operate within international norms and further its business objectives.

In much the same way the Saudis’ adoption of a regressive-progressive model enables them to continue to cling to illiberal politics while projecting modernization and promising a transformative vision for the kingdom, Netflix’s willingness to relinquish some control over content distribution seems to put it in a win-win situation, as well. Caving in to the Saudis only increased viewers’ interest in watching the blocked episode, which remained available elsewhere, and the wide press coverage of Netflix’s censorship controversy drew even more attention to the critical content of the program. Adorned with the Netflix logo, the banned episode went viral on the social web, thus ending up being a marketing stunt with over three million YouTube views, thousands of likes, and innumerable comments. Commenting on Netflix’s decision to pull the episode out of local circulation, Minhaj tweeted: ‘Clearly, the best way to stop people from watching something is to ban it, make it trend online, and then leave it up on YouTube’. Content that is thought to be suppressed through a convenient, mutually agreeable arrangement came to acquire a life of its own wholly outside the purview of the state and the distribution circle of the streaming service, with intrigued users accessing it, consuming it, and sharing it more intensely than if it were circulating solely on the streaming platform.

It would be misleading, though, to suggest that this arrangement benefits states and digital companies equally. Interferences that proved to be disruptive complicated the symbiotic relationship between the Saudi state and Netflix. The dynamics in place spawned non-conventional actors who, in their role as counter-users and counter-publics, developed the ability to undermine the state and act independently of corporate logics. Neither the state nor the streaming service were (or are) in a position to control dynamics interference emanating from loose actors, ranging from the comedian himself, who rose to fame through his Netflix series but acquired a symbolic power that is independent of the streaming service, to the producers who resurrected, reintroduced, and recirculated (via YouTube and through sharing) undesired content that both the state and businesses sought to suppress, thereby creating more demand for the censored episode and attracting more attention to the issues the program criticizes.

At the personal level, Minhaj actively sought these audience-captivating controversies to boost his profile as ‘watchdog comedian’ – a stunt he then reproduced with subsequent shows, including a dig at Prime Minister Narendra Modi and the Indian elections. This was followed by similar episodes devoted to corruption in Brazil and the drug war in the Philippines. In an interview, Minhaj noted, ‘I am a staunch proponent and advocate for freedom of speech, even if it hurts my own feelings. Because having those civil liberties has given me and my community the ability to communicate how we feel’ (Elsayed, 2018). Such focus enabled Minhaj to bypass Netflix altogether and capitalize on a ‘working formula’ to ‘push the boundaries’ and boost his popularity as a champion of free speech.

From a business perspective, Netflix came out of this transactional relationship having benefited the most by claiming to be following the law, as this arrangement ensures continued access to the lucrative Saudi market. Yet by prioritizing profit over freedom of speech, Netflix opened itself to criticism, including a rebuke from Human Rights Watch (Busby, 2019). Faced with a backlash, Netflix defended its position, noting, ‘We’re not in the truth-to-power business, we’re in the entertainment business’ (Alexander, 2019). Historically – even prior to the Minhaj incident – Netflix has refused to take a stand against those who might censor it as it expands internationally. In an interview, Netflix’s CEO Reed Hastings noted, ‘I think entertainment companies have to make compromises over time . . . the thrust of what we’re trying to do is have the artistic vision be consistent through the world’ (Cox, 2016a). Notably, the streaming company defines itself less as a champion of freedom than as a global company that is present everywhere. Seen from this standpoint, compliance is less a reactive measure than it is a business strategy to reach corporate globalizing and de-territorializing objectives.

Conclusion

In line with the interconnected and overlapping logics of media sovereignty, of economic interdependence, and of sociocultural norms, the symbiotic relationship between business and nation-states operates under specific forms of capitalism. In this article, we have drawn on the controversy surrounding Netflix in Arabia to analyze this unfolding relationship. In the context of digital capitalism, companies offering content and services have to reckon with the territoriality of the nation-state. Although Castells (1996) believes that ‘the architecture of this network technology is such that it is very difficult to censor or control it’, the resulting practices seem to point in a different direction (p. 352). As de-territorialized content or services travel across sociocultural, political, and economic borders, they become subject to re-territorialization practices that often involve some level of control and censorship. Faced with these challenges, companies such as Netflix tend to comply with territorial – in this case nation-state – laws by withdrawing specific content or services to limit or circumvent total bans. In such arrangements, companies retain control over market presence and expansion, while risking reputational damage.

The foregoing analysis also suggests that the nation-state is able to negotiate a certain level of power, but not quite win outright. Despite compliance from Netflix, the Saudis lost to Minhaj, non-state actors, and the general public. This is not to underestimate the ability of the state to defend its interests, particularly when it comes to an oil-rich country with the wherewithal to invest in the new digital economy. According to Oxford Economics, ICT will contribute around 5% to the kingdom’s total GDP by 2022 from various sectors including banking, insurance, education, power, and utilities (EY, 2019). While moving to enact a public listing, the state-owned oil giant Aramco, which would give partial ownership to foreign shareholders, Saudi Arabia went aggressively after some global tech companies. Keen on joining the fourth industrial revolution, the Saudis have pursued investment opportunities in tech areas from the Internet of Things (IoT) to cybersecurity, with investments to reach US$135 billion by 2030 (Saudi Gazette, 2019). Through its sovereign wealth fund, the kingdom has invested heavily in Silicon Valley and other regions. This includes private interests, such as Prince Al Waleed Bin Talal’s Kingdom Holdings as the second-largest shareholder in Twitter, or state investments, such as the kingdom’s Public Investment Fund in SoftBank’s US$100 billion Vision Fund (Swisher, 2019). Such ventures could transform the symbiotic relationship between state and business, as the former becomes (co-)owner of the means of production that can potentially translate into an added ability to subvert and control content – a strategy used in the pre-digital era.

Significantly, the case of Netflix in Arabia has relevance beyond the study of streaming platforms and conservative states. The account and analysis presented here regarding the logic of symbiotic relationship draws attention to the various ways in which emerging players in the digital era – from peer-to-peer hospitality such as Airbnb to transportation services such as Uber – have navigated territoriality and the extent of mutual accommodation between state and business. In the context of digital capitalism, the ability of companies to provide de-territorialized content and services that are easily re-territorialized within nation-states highlights relatively unexplored points of intersections, tensions, and mutations.

Footnotes

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iDs

Joe F Khalil

Mohamed Zayani

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