NetFlix 2002 Annual Report Download - page 6

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What’s more, Netflix subscribers can keep DVDs, up to three at one time, for as long as they
wish. They never pay late fees. When it’s time to return a movie, a subscriber puts it back
into the postage-paid mailer that came with it and drops it into a mailbox. That’s all there is
to it. As soon as we receive that DVD, we automatically mail the next available selection on
the subscriber’s rental list. More than half of our current subscribers can receive their DVDs
the next day; most of the rest, in just two days.
Our vision is to change the way people access and view the movies they love. To accom-
plish that, on a large scale, we have set a long-term goal to acquire 5 million subscribers in
the U.S., or 5 percent of U.S. TV households over the next four to seven years. By then,
we expect to generate $1 billion in revenue and $100 to $200 million in free cash flow.
In the shorter term, a year from now, I expect to be able to report to you that we ended the
year 2003 with 25 operational U.S. distribution hubs, initiated international expansion into
Canada, and generated total revenue of more than $235 million.
We are fortunate to have in place an extremely strong management team that has both the
experience and the vision to propel the Company forward in what we believe will be a
dynamic new market. As we continue to roll out and improve our service, we are optimistic
that we have the potential for even greater gains ahead.
The coming year promises to be an exciting one for Netflix, and we hope that you’ll be with
us to enjoy the show. On behalf of the management team and dedicated staff at Netflix,
I would like to thank you for your continued support over the past year, and I look forward
to your continued participation as a member of the Netflix family.
Sincerely,
Reed Hastings
Chief Executive Officer, President, and Co-Founder
P.S. If you’re not already a Netflix subscriber and would like to try out our service at no
obligation, I would like to personally invite you to take advantage of a free, extended-trial
offer at netflix.com. Simply type in 60177346 in the promotional code field, and enjoy
Netflix for free, with my compliments.
LOOKING AHEAD.