NetFlix 2014 Annual Report Download - page 5

Table of Contents
COMPETITION
The market for entertainment video is intensely competitive and subject to rapid change. We compete against other entertainment video
providers, such as multichannel video programming distributors ("MVPDs"), Internet-based movie and TV content providers (including those
that provide pirated content) and DVD rental outlets and more broadly against other sources of entertainment that our members could choose in
their moments of free time. We also compete against entertainment video providers in obtaining content that our members love, both for
licensed streaming content and for original content projects.
While consumers may maintain simultaneous relationships with multiple entertainment sources, we strive for consumers to choose us in
their moments of free time. We have often referred to this choice as our objective of "winning moments of truth." In attempting to win these
moments of truth with our members, we are continually improving our service, including both our technology and our content, which is
increasingly exclusive and curated, including our own original programming.
SEASONALITY
Our member growth exhibits a seasonal pattern that reflects variations when consumers buy Internet-connected devices and when they
tend to increase their viewing. Our domestic member growth is generally greatest in our fourth and first quarters (October through March),
slowing in our second quarter (April through June) and then accelerating in our third quarter (July through September). We expect each market
in our International Steaming segment to demonstrate more predictable seasonal patterns as our service offering in each market becomes more
established and we have a longer history to assess such patterns. Additionally, the variable expenses associated with shipments of DVDs are
highest in the first quarter due to the seasonal nature of DVD usage.
INTELLECTUAL PROPERTY
We regard our trademarks, service marks, copyrights, patents, domain names, trade dress, trade secrets, proprietary technologies and
similar intellectual property as important to our success. We use a combination of patent, trademark, copyright and trade secret laws and
confidentiality agreements to protect our proprietary intellectual property. Our ability to protect and enforce our intellectual property rights is
subject to certain risks and from time to time we encounter disputes over rights and obligations concerning intellectual property. We cannot
provide assurance that we will prevail in any intellectual property disputes.
EMPLOYEES
As of December 31, 2014, we had 2,189 full-time employees. We also utilize part-time and temporary employees, primarily in our DVD
fulfillment operations, to respond to the fluctuating demand for DVD shipments. As of December 31, 2014, we had 261 part-time and
temporary employees. Our employees are not covered by collective bargaining agreements, however, to the extent we develop and produce our
own content, certain employees of affiliated entities may be covered by such agreements, including certain writers, directors, actors and
production personnel.
OTHER INFORMATION
We were incorporated in Delaware in August 1997 and completed our initial public offering in May 2002. Our principal executive offices
are located at 100 Winchester Circle, Los Gatos, California 95032, and our telephone number is [phone].
We maintain a Web site at www.netflix.com. The contents of our Web site are not incorporated in, or otherwise to be regarded as part of,
this Annual Report on Form 10-K. In this Annual Report on Form 10-K, “Netflix,” the “Company,” “we,” “us,” “our” and the “registrant”
refer
to Netflix, Inc. We make available, free of charge on our web site, access to our annual report on Form 10-K, our quarterly reports on Form 10-
Q, our current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we file or furnish them electronically with the
Securities and Exchange Commission ("SEC").
Investors and others should note that we announce material financial information to our investors using our investor relations website
( http://ir.netflix.com ), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media to
communicate with our members and the public about our company, our services and other issues. It is possible that the information we post on
social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company
to review the information we post on the social media channels listed on our investor relations website.
2