Exhibit 1

Income Statements for NetFlix.com, Inc.

Year Ended December 13,

1998 1999

Revenues 1,339 5,006

Cost of revenue 1,311 4,373

Gross profit 28 633

Operating expenses:
Product development 3,857 7,413
Sales and marketing 4,815 16,424
General and administrative 1,358 2,085
Stock-based compensation 1,151 4,742

Total operating expenses 11,181 30,664

Operating loss (11,153) (30,031)
Other income (expense)
Interest and other income, net 114 924
Interest expense, net (42) (738)
Net loss (11,081) (29,845)

Source: Company reports.

Exhibit 2
Balance Sheets for NetFlix.com, Inc.

As of December 31,
1998 1999

Assets
Current assets
Cash and cash equivalents 1,061 14,198
Short-term investments - 6,322
Prepaids and other current assets 635 720
Total current assets 1,696 21,240
Rental library, net 2,011 8,695
Property and equipment, net 1,062 4,499
Deposits and other assets 80 339
Total assets 4,849 34,773

Liabilities and Shareholders' Equity

Current liabilities
Notes payable 1,000 625
Current portion of capital lease obligations 579 571
Accounts payable 3,063 5,334
Accrued liabilities 1,640 3,211
Deferred revenue 118 471
Total current liabilities 6,400 10,212
Capital lease obligations 172 811
Note payable - 3,959
Total liabilities 6,572 14,982
Mandatorily redeemable conv. pref stock 6,321 51,819
Shareholders equity (deficit):
Convertible preferred stock 4 4
Common stock 3 7
Additional paid-in capital 8,100 16,087
Deferred stock-based compensation (4,711) (6,841)
Accumulated deficit (11,440) (41,285)
Total shareholders' equity (deficit) (8,044) (32,028)
Total liabilities and shareholders' equity (deficit) 4,849 34,773

Source: Company reports.

Exhibit 3
Quarterly Operating Results for NetFlix.com, Inc.

Quarter Ended
March 31 June 30 Sept. 30 Dec. 31
1999 1999 1999 1999

Revenues 847 854 1,170 2,135

Cost of revenue 663 670 1,276 1,764
Gross profit 184 184 (106) 371
Operating expenses
Product development 1,324 1,533 2,106 2,450
Sales and marketing 1,954 2,930 4,994 6,546
General and administrative 532 553 404 596
Stock-based compensation 787 1,203 1,500 1,252
Total operating expenses 4,597 6,219 9,004 10,844
Operating loss (4,413) (6,035) (9,110) (10,473)
Interest and other income, net 74 112 351 387
Interest expense, net (165) (129) (149) (295)
Net loss (4,504) (6,052) (8,908) (10,381)

Source: Company reports.

Exhibit 4
Historical and projected unit sales, average unit price, and household penetration rates for
videocassette recorders and digital video disc players during the first five years after introduction*

Annual Sales
Millions of Units
6

5 Videocassette
Recorders (VCR)

4 Digital Video Disc

Players (DVD)

0
0 1 2 3 4 5
Years since introduction

Household Penetration Rates and Average Unit Price

Percent of Households
Dollars
16% $900

14% $800

$700
12%
$600
10%
$500
8%
$400
6% VCR Penetration
$300
DVD Penetration
4%
VCR Unit Price $200
2% DVD Unit Price $100

0% $0
0 1 2 3 4 5
Years since introduction
* Unit sales are sales to dealers. Consumer sales are estimated to be about 60% of dealer sales.
For DVD players, years 3, 4, and 5 are forecasted values.

Source: Consumers Electronics Manufacturer's Association.

Exhibit 5
Rental Library (thousands of dollars)

As of December 31,
1998 1999

Rental library 2,186 10,882

Less accumulated depreciation (175) (2,187)
Rental library, net 2,011 8,695

Source: Company Reports.

 COSTOS E INGRESOS NUEVO SUSCRIPT
VE 4.3 PELIS Y LAS REGRESA VE 4.3 PELIS Y LAS REGRESA

SUSCRIPCION $0.00 $0.00

INGRESOS INGRESOS

MES 1 MES 2

$0.00 $0.00 $0.00

(Mandar 4 discos ) MANDAR 4.3 DISCOS MANDAR 4.3 DISCOS

$0.00 $0.00 $0.00

(Comprar 5.6 DVD ) Adq de 1.1 nuevos discos Adq de 1.1 nuevos discos

FLUJO $0.00 $0.00 $0.00

FLUJO ACUMULADO $0.00 $0.00 $0.00

COSTOS E INGRESOS NUEVO SUSCRIPT

VE 4.3 PELIS Y LAS REGRESA VE 4.3 PELIS Y LAS REGRESA

SUSCRIPCION $0.00 $19.95

INGRESOS INGRESOS

MES 1 MES 2

-$4.00 -$4.30 -$4.30

(Mandar 4 discos ) MANDAR 4.3 DISCOS MANDAR 4.3 DISCOS

-$98.28 -$9.83 -$9.83

(Comprar 5.6 DVD ) Adq de 1.1 nuevos discos Adq de 1.1 nuevos discos
NUEVO SUSCRIPTOR
LIS Y LAS REGRESA VE 4.3 PELIS Y LAS REGRESA

$0.00
INGRESOS

MES 2 MES 3

$0.00
DAR 4.3 DISCOS MANDAR 4.3 DISCOS

$0.00
1.1 nuevos discos Adq de 1.1 nuevos discos

$0.00

$0.00

NUEVO SUSCRIPTOR
LIS Y LAS REGRESA VE 4.3 PELIS Y LAS REGRESA

$19.95
INGRESOS

MES 2 MES 3

-$4.30
DAR 4.3 DISCOS MANDAR 4.3 DISCOS

-$9.83
1.1 nuevos discos Adq de 1.1 nuevos discos
 MES MESES
GRATIS SUBS

Envío Inicial Stock en cliente (4.00) ( 1.0 x 4 ) 0.00

Envío promedio mensual al cliente (4.30) ( 4.3 x 1 ) (4.30)
Stock inicial de películas con cliente (98.90) ( 17.55 * 5.6 ) ** approx (9.90) ( 17.55 x 0.56) ** approx
(107.20) (14.20)

Ingresos 0.00 20.00

(107.20) 5.80
 PROBABILIDAD CON CLIENTES
SI SE DA DE BAJA A
FIN DE MES 1

30% 89.00
( 98.90 - 9.90 = 89.00 )
( 17.55 x 0.56) ** approx
COSTO AL
SUSCRIBIRSE MES
GRATIS

60%
-107.20
( -4.00 - 4.30 - 98.90 )
70% SI SE CONVIERTE EN
SUSCRIPTOR DE
PAGA

40%
N CLIENTES

5.80 utilidad mes 2

5.80 utilidad mes 3
5.80 utilidad mes 4
5.80 utilidad mes 5
5.80 utilidad mes 6
SI SE SALE A LOS 6 98.90 regreso de títulos
MESES
-9.90 compra de renovación mes 1

118.30

SI SE MANTIENE
MÁS DE 6 MESES

5.80
 PROMEDIO DE INVENTARIOS Y COSTOS LOGÍSTICOS
Total de Envíos 800,000
Total Suscriptores 155,000
Suscriptores pagando 77.4% 120,000
Suscriptores Gratuitos 22.6% 35,000
Discos con clientes 4
Discos enviados inicialmente 140,000 140,000
Envíos regulares de discos 660,000
Discos promedio vistos al mes 4.3
MES GRATIS MES PAGO
COSTOS Stock Inicial de Discos 4.0 -
LOGISTICOS Discos Vistos al Mes 4.3 4.3
8.3 4.3
Gastos de envío 1.0 1.0
Gasto total de envío al mes 8.3 4.3
Est

Est
Est
 Valor del Inventario a dic 1999 10,882,000 Pag 11
Discos en librerías 620,000 Pag 4
17.55 Promedio

Suscriptores a Marzo 2000 155,000 Estimado Cuadro Anterior

Crecimiento por trimestre 41.4%
Suscriptores estimados Dic 1999 110,000 Redondeo (Regresar cifra a dic 99)

Discos por suscriptor 5.6 Pag 4

Discos Base 80% 4.5 Pag 4
Nuevos Lanzamientos 20% 1.1 Pag 4
Meses pagados 0.6 (Mitad de 1.1) Neteo de la obsolescencia

Costo discos por suscriptor

Suscriptores en mes Gratuito 98.29 (17.55 x 5.6)
Suscriptores ya pagando 10.53 (17.55 x 0.6)
timado Cuadro Anterior

egresar cifra a dic 99)

eteo de la obsolescencia en discos

(17.55 x 5.6)
(17.55 x 0.6)
 MESES
MES GRATIS SUBSECUENTES

Envío Inicial Stock en cliente (4.00) ( 1.0 x 4 ) 0.00

Envío promedio mensual al cliente (4.30) ( 4.3 x 1 ) (4.30)
Stock inicial de películas con cliente (98.90) ( 17.55 * 5.6 ) ** approx (9.90)
(107.20) (14.20)
Ingresos 0.00 20.00
(107.20) 5.80
1.00
PROBABILIDAD + FLUJO PROBA INICIO
Cliente que sale al Mes 1 30% (107.20)
Cliente que sale a los 6 meses 42% (107.20)
Cliente retenido 28% (107.20)
FLUJO NETO ESTIMADO (107.20)

Tasa de descuento mensual 1.7% 1.00

FLUJO DESCONTADO (107.20)

FLUJO DESCONTADO ACUMULADO (107.20)

 Estas 3 vienen de los cálculos del "tree"
( 17.55 x 0.56) ** approx

MES 1 MES 6 MES 12 AÑO 2 AÑO 3 AÑO 4 AÑO 5

89.00
118.30
63.80 69.60 69.60 69.60 164.10
26.70 49.69 17.86 19.49 19.49 19.49 45.95

0.98 0.91 0.85 0.76 0.63 0.53 0.44

26.26 45.21 15.18 14.81 12.28 10.33 20.22

(80.94) (35.72) (20.54) (5.73) 6.55 16.88 37.10

VALOR PRESENTE NETO DE NUEVO SUSCRIPTOR

91.46
 110,000 Suscriptores
37.10 VPN por Suscriptor
Valor Suscriptores ACTUALES $ 4,080,454

2000 2001 2002

Factor descuento 20% 0.8333 0.6944 0.5787

Valor por suscriptor 37.10 37.10 37.10

Suscriptores potenciales 420,000 630,000 945,000

50% 50%

15,579,915 23,369,872 35,054,808

Valor Suscriptores FUTUROS $ 296,738,545 12,983,262 16,229,078 20,286,347

GTS de desarrollo de producto 10,000,000 10,000,000 10,000,000

Gts Generales y de ventas 2,500,000 2,500,000 2,500,000
SUMA 12,500,000 12,500,000 12,500,000

Valor presente de GASTOS FUTUROS $ 67,523,470 10,416,667 8,680,556 7,233,796

$ 233,295,529 Valor antes de impuestos del Modelo de Negocio

 6.0
2003 2004 PERPETUIDAD
0.4823 0.4019 0.4019

37.10 37.10

1,417,500 2,126,250
50% 50%

52,582,212 78,873,318 473,239,910

25,357,934 31,697,418 190,184,506

10,000,000 10,000,000
2,500,000 2,500,000
12,500,000 12,500,000 75,000,000

6,028,164 5,023,470 30,140,818

delo de Negocio