NetFlix 2003 Annual Report Download - page 5
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DearFellowShareholders,
Byanymeasure,2003wasaphenomenalyearforNetflix.
Inthis,oursecondyearasapubliccompany,weonceagain
surpassedinvestorexpectationswithrecordfinancialresults
inrevenues,netincomeandfreecashflow.
Netflixachievedprofitabilityforthefirsttimein2003.TheCompanyrecordedrevenues
of$272.2million,up78percentcomparedwith$152.8millionfor2002.Netincomewas
$6.5million,comparedwithanetlossof$20.9millionintheprioryear.Thisstrongfinancial
performancewasdriven,inpart,byourrapidlyincreasingsubscriberbasewhichgrewto
nearly1.5millionmembers,up74percentover2002.
AMainstreamPhenomenon
Perhapsevenmoresignificantly,Netflixhassucceededinbecomingatrulyintegral
partoftheconsumerentertainmentlandscape.Atyear-end2003,webelieveNetflix
hadapproximately95percentofthefast-growingmarketforonlineDVDmovierentals.
WecurrentlyshipmorethantwoandahalfmillionDVDsaweek,withremarkable
reliabilityandprecision.Customersatisfactionishigh,becausewehavethemoviesthat
oursubscriberswant;becausewepersonalizeourwebsitetohelpsubscribersdiscover
newmoviestheywilllove;andbecausewedeliverthosemovies,generally,theverynext
businessday.
TheNetflixmodelisbasedongivingtoday’smovieconsumersacombinationof
convenience,valueandselectionthatappealstoabroadanddiversegroupofpeople—
notjustavidmoviefans.
Inourmostpopularplan,for$19.95amonthNetflixsubscribersrentasmanyDVDsasthey
want,andkeepthemaslongastheywant,withthreemoviesoutatatime.Thereareno
duedates,nolatefeesandnoshippingfees.DVDsaredeliveredbyfirst-classmailfrom
ACompellingStoryofRapidGrowthandCategoryDominance
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Netflix2003AnnualReport