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Financial Status of Netflix

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Netflix is the most successful online movie-by-mail rental in the United States, founded by Wilmont Reed Hastings Jr in 1997. Two years after founding the company, they launched the companies subscription service

Within another four years its popularity grew to one million subscriber and by the end of 2008 Netflix had 12 million subscribers. Netflix has adopted the code of ethics, for its directors, officers, and other employees to deter wrongdoing and to promote ethical behavior. Netflix wants to maintain a honest and ethical code of conduct throughout its company. In doing so the company would like all report and documents to be disclosed in a full, fair, accurate, and timely manor.

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Netflix, Inc. (Netflix) is a US-based online movie rental subscription service provider. The company’s subscribers can instantly watch unlimited TV shows and movies streamed over the Internet to their TVs, computers and mobile devices. It offers movie titles, TV programs, andother filmed entertainment on DVDs and Blu-ray discs to its subscribed customers.The company operates its business activities through three reportable segments, namely,Domestic Streaming, International Streaming and Domestic DVD. The International and Domestic Streaming segments of the company generate the revenue from the monthly subscription servicesthat consist solely of streaming content. The company’s Domestic DVD segment generates revenue from monthly subscription services that consist of DVD by mail. For the twelve monthsended December 31, 2013, the company reported revenue of $2,751m for the DomesticStreaming segment. The segment accounted for 63 % of the company’s total revenue. The International Streaming reported revenue of $712m contributing 16% to the company's totalrevenue. The Domestic DVD segment reported revenue of $910m contributing 21% to thecompany's total revenue. The company obtains content through streaming content license agreements, DVD direct purchases and DVD revenue sharing agreements, from various studios and other content providers

Netflix markets the services of the company through several channels such as broad based media (radio and television), online advertising and strategic partnerships. The marketingservices of the company include free trial memberships to new members.

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In the first quarter of 2011, rentals and sales of packaged Blu-rays and DVDs plummeted by about 20 per cent. The packaged disc sales also fell by about 20 per cent. The ex-CMO Leslie Kilgore left the company in January 2012, and the position was vacant until filled by Kelly Bennett, who is the former vice-president of interactive, worldwide marketing at Warner Bros. This long wait between CMOs is a cause of concern for many of the company’s shareholders, and people are wondering whether the company will be able to continue. I believe Netflix isn’t doing as well because there is a growing number of locations where a person can stream a video, and quite often these locations are for free. Several major competitors have also come on board to offer services that are comparable to those offered at Netflix. To battle this, Netflix increased its price by 60 per cent in June 2011 and customers have left since the change, (Tomko, 2011). Netflix was at its prime 7 years ago when it was distributing one million DVDs per day, but now many people are going online for video streaming and this is an area where Netflix has come across more competition.

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Definitely, for the six months ended 30 June 2020, Netflix Inc revenues increased 26% to $11.92B. Net income increased from $614.7M to $1.43B. Revenues reflect Revenue per Customer - Average DVD US increase of 5% to $13.17

Net income benefited from Marketing decrease of 23% to $938.2M (expense). Basic Earnings per Share excluding Extraordinary Items increased from $1.41 to $3.25.

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Godet, A. (2012, Oct. 10). Amazon to Launch SVOD Service in France. The Hollywood Reporter.

Tomko, M. (2011, Nov. 1). Ideas aplenty on how Netflix could win back customers. Medill Reports Chicago.

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