NetFlix 2014 Annual Report Download - page 4

Table of Contents
PART I
Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. These
forward
-looking statements include, but are not limited to, statements regarding: our core strategy; the growth of Internet delivery of content;
the growth in our streaming memberships; the decline in our DVD memberships and the resources allocated to our DVD segment; the market
opportunity for streaming content; contribution margins; contribution profits (losses); liquidity; free cash flows; revenues; net income; legal
costs; operating cash flows; stock price volatility; membership growth rates; timing of facilities construction; nature of our content
agreements; member viewing habits; payment of future dividends; obtaining additional capital; our content library and marketing investments,
including investments in original programming; significance of future contractual obligations; realization of deferred tax assets; seasonality;
method of content delivery; and international expansion. These forward-looking statements are subject to risks and uncertainties that could
cause actual results and events to differ. A detailed discussion of these and other risks and uncertainties that could cause actual results and
events to differ materially from such forward-looking statements is included throughout this filing and particularly in Item 1A: "Risk Factors"
section set forth in this Annual Report on Form 10-K. All forward-looking statements included in this document are based on information
available to us on the date hereof, and we assume no obligation to revise or publicly release any revision to any such forward-looking
statement, except as may otherwise be required by law.
ABOUT US
Netflix, Inc. (“Netflix”, “the Company”, “we”, or “us”) is the world’s leading Internet television network with over 57 million streaming
members in nearly 50 countries enjoying more than two billion hours of TV shows and movies per month, including original series,
documentaries and feature films. Our members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen.
Members can play, pause and resume watching, all without commercials or commitments. Additionally, in the United States ("U.S."), our
members can receive DVDs delivered quickly to their homes.
We are a pioneer in the Internet delivery of TV shows and movies, launching our streaming service in 2007. Since this launch, we have
developed an ecosystem for Internet-connected screens and have licensed and acquired increasing amounts of content that enable consumers to
enjoy TV shows and movies directly on their TVs, computers and mobile devices. As a result of these efforts, we have experienced growing
consumer acceptance of, and interest in, the delivery of TV shows and movies directly over the Internet.
Our core strategy is to grow our streaming membership business globally within the parameters of our consolidated net income and
operating segment contribution profit (loss) targets. We are continuously improving our members' experience by expanding our streaming
content with a focus on a programming mix of content that delights our members. We are continually enhancing our user interface and
extending our streaming service to even more Internet-connected screens.
We continue to grow our streaming service both domestically and internationally. We began our international expansion with Canada in
2010 and have since launched our service in Latin America and several European countries. We have also expanded our streaming content
offering to include more exclusive and original programming, including several Emmy, Golden Globe and Academy Award nominated original
series and documentaries.
Prior to July 2011, in the U.S., our streaming and DVD-by-mail operations were combined and members could receive both streaming
content and DVDs under a single “hybrid” plan. In July 2011, we separated the combined plans, making it necessary for members who wish to
receive both DVDs-by-mail and streaming content to have two separate membership plans.
BUSINESS SEGMENTS
The Company has three reportable segments: Domestic streaming, International streaming and Domestic DVD. The Domestic and
International streaming segments derive revenues from monthly membership fees for services consisting solely of streaming content. The
Domestic DVD segment derives revenues from monthly membership fees for services consisting solely of DVD-by-mail. For additional
information regarding our segments, including information about our financial results by geography, see Note 12 of Item 8, Financial
Statements and Supplementary Data .
1
Item 1.
Business