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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 decline in our DVD memberships and the resources
allocated to our DVD segment; contribution margins; contribution profits (losses); liquidity; free cash flows;
revenues; net income; operating cash flows; stock price volatility; pricing changes; the impact of, and the
Company’s response to, new accounting standards; action by competitors; risk of material impairment of current
investment portfolio; reinvestment of earnings in foreign subsidiaries; membership growth rates; timing of
facilities construction; nature of our content agreements; member viewing habits; payment of future dividends;
obtaining additional capital; our content and marketing investments, including investments in original
programming; significance and timing of 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.
Item 1. Business
ABOUT US
Netflix, Inc. (“Netflix”, “the Company”, “we”, or “us”) is the world’s leading Internet television network
with over 75 million streaming members in over 190 countries enjoying more than 125 million hours of TV
shows and movies per day, 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 added increasing
amounts of content that enable consumers to enjoy TV shows and movies directly on their Internet-connected
screens. 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. In addition, we are perpetually enhancing our user interface and extending our streaming
service to 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 globally, with the exception of
The People’s Republic of China and territories where U.S. companies are not allowed to operate. 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. Our original
programming increasingly includes content that we produce.
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