NetFlix 2015 Annual Report Download - page 10

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• difficulties and costs associated with staffing and managing foreign operations;
• management distraction;
• political or social unrest and economic instability;
• compliance with U.S. laws such as the Foreign Corrupt Practices Act, export controls and economic
sanctions, and local laws prohibiting corrupt payments to government officials;
• difficulties in understanding and complying with local laws, regulations and customs in foreign
jurisdictions;
• regulatory requirements or government action against our service, whether in response to enforcement of
actual or purported legal and regulatory requirements or otherwise, that results in disruption or non-
availability of our service or particular content in the applicable jurisdiction;
• less favorable foreign intellectual property laws;
• adverse tax consequences such as those related to repatriation of cash from foreign jurisdictions into the
United States, non-income related taxes such as value-added tax or other indirect taxes, changes in tax
laws or their interpretations, or the application of judgment in determining our global provision for
income taxes and other tax liabilities given intercompany transactions and calculations where the
ultimate tax determination is uncertain;
• fluctuations in currency exchange rates, which we do not use foreign exchange contracts or derivatives to
hedge against and which could impact revenues and expenses of our international operations and expose
us to foreign currency exchange rate risk;
• profit repatriation and other restrictions on the transfer of funds;
• differing payment processing systems as well as consumer use and acceptance of electronic payment
methods, such as payment cards;
• new and different sources of competition;
• censorship requirements that cause us to remove or edit popular content, leading to consumer
disappointment or dissatisfaction with our service;
• low usage and/or penetration of Internet- connected consumer electronic devices;
• different and more stringent user protection, data protection, privacy and other laws;
• availability of reliable broadband connectivity and wide area networks in targeted areas for expansion;
• integration and operational challenges as well as potential unknown liabilities in connection with
companies we may acquire or control; and
• differing, and often more lenient, laws and consumer understanding/attitudes regarding the illegality of
piracy.
Our failure to manage any of these risks successfully could harm our international operations and our
overall business, and results of our operations.
If we fail to maintain or, in new markets establish, a positive reputation with consumers concerning our
service, including the content we offer, we may not be able to attract or retain members, and our operating
results may be adversely affected.
We believe that a positive reputation with consumers concerning our service is important in attracting and
retaining members who have a number of choices from which to obtain entertainment video. To the extent our
content, in particular, our original programming, is perceived as low quality, offensive or otherwise not
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