4. http://www.youtube.com/watch?v=LTgRm6Qgscc&feature=related

5.  New competitor  International expansion

6.  Already gives free two day shipping  Now offers free streaming of 5000 movies/TV shows  Cost $79 per year after free month  Netflix cheapest plan is $7.99 a month($95.88 a year)

7.  Amazon prime is cheaper  They offer more perks  Netflix only has movies but Amazon prime has the 2 day shipping.

8.  In 2009 “the US accounted for 100% of the total revenues”  Last year streaming was additionally offered in Canada  If Canada does well they will further enter other markets this year

9. Operating losses will be 50 million for 2 nd half of year If confidence is gained investment will be aggressive in international markets in 2012

10.  Losses are expected at first  Different countries may respond differently  Streaming only in all international markets or will they ship too?

11. “There has to be another way” – Reed Hastings Netflix says it revolutionized the way people watch movies  Subscribers can watch movies instantly and unlimited without late fees.

12. 2002 2010 2000 -2002 1999 1997/98

13. Senior Management Team Reed Hastings, Co-founder & CEO Neil Hunt, Chief Product Officer David Hyman, General Counsel Leslie Kilgore, Chief Marketing Officer David Wells, Chief Financial Officer Patty McCord, Chief Talent Officer Andrew Rendich, Chief Service & DVD Operations Officer Ted Sarandos, Chief Content Officer Board of Directors Richard N. Barton - Zillow, Inc. A. George "Skip" Battle - Investor Charles Giancarlo - Silver Lake Tim Haley - Redpoint Ventures Reed Hastings - Netflix, Inc. Jay Hoag - Technology Crossover Ventures Ann Mather, Pixar; Disney

14.  High wages above market swagger  Talent density  Headhunting through networking  Generous compensations  No golden handcuffs

15.  DVD / Blu-ray disc delivery without shipping / late fees  Streaming on TV via Wii, PS3, XBOX 360, Sony, Panasonic, etc.  Online watching on PC and Mac  Streaming on mobile devices such as iPad, iPhone and Windows Phone  Limited and unlimited plans available for subscribers  http://www.netflix.com/ http://www.netflix.com/

16.  February 22, 2011 Netflix and CBS have announced a two-year non-exclusive licensing agreement that will bring more current and catalog content to the Netflix streaming service.  Netflix in now partnered with all 4 major television networks to provide popular TV shows on Netflix content  Working with NBC to provide premium content for some of NBC’s most popular content (ie Seinfeld, Friends)

17.  HBO – If Netflix were able to secure a partnership with the premium content provider, this would provide Netflix access to blockbuster shows like The Sopranos and Six Feet Under  Disney – When a deal is inevitably settled between the two giants, Netflix will gain more family oriented films

18.  PS3  Wii  Xbox  iPad

19.  Internet  Direct: Email  Mass marketing: Affiliates (Banner ads, pop-ups, etc.)  Television  http://www.youtube.com/watch?v=5f558iOePUk http://www.youtube.com/watch?v=5f558iOePUk  Magazines

21. 200820092010 Revenue$1,364,661,000$1,670,269,000$2,162,625,000 Advertising Expense $199,240,506$237,178,198$294,117,000 % of Revenue14.6%14.2%13.6%

22. Income statement: The numbers on the statement show significant growth over the last two years.

23.  Assets = $982,000*  Liabilities= $691,903*  Stock Holders Equity= $290,164* *Numbers in Thousands

25.  Amazon Prime: Larger customer base, better price, less selection  Redbox: Convenience, price, affordability  Premium Cable Channels AmazonRedboxHBO and Cinemax Customer Base 81 million (2008)26,000 locations 1 billion rentals (2010) 80 million Movie Selection 5,000200 at one timeAll the movie and shows on TV Revenue $34.2 billion$231.8 million$3.7 billion

26.  Expansion of streaming media, reduction in mail order  Potentially doing away with mail order system and going 100% streaming  Premium content, exclusive content  Netflix Mobile, streaming video on mobile devices

27.  Netflix has confirmed plans to buy ‘House of Cards’, a new show being produced by David Fincher and starring Kevin Spacey  This move would put Netflix in direct competition with cable companies and premium content providers like HBO and Showtime  This would effectively make them a premium cable television channel

28. “There has to be another way” - Redbox - Amazon Prime - TV networks - Devices - Expansion of streaming on mobile devices / internationally - Premium streaming - Premium television channel

29. The End