Netflix

About Netflix

Netflix (NASDAQ: NFLX), is the largest online DVD rental service, offering flat rate rental-by-mail and online streaming to customers in the United States. Established in 1997 and headquartered in Los Gatos, California, it has amassed a collection of 90,000 titles and over 6.7 million subscribers. They have over 55 million discs and ship 1.6 million a day, on average. Netflix previously claimed to spend about $300 million a year on postage. On February 25, 2007, Netflix announced the billionth DVD delivery. The company topped the ForeSee Results’ Top 100 Online Retail Satisfaction Index with an American Customer Satisfaction Index score of 86, well over the industry average of 75.

The company provides a monthly flat-fee service for the rental of DVD movies. A subscriber creates an ordered list, called a rental queue, of DVDs to rent. The DVDs are delivered individually via the United States Postal Service from an array of regional warehouses. Currently, there are over 100 shipping points located throughout the United States. A subscriber can keep a rented DVD as long as desired, but has a limit on the number of DVDs (determined by subscription level) that can be checked out at any one time. To rent a new DVD, the subscriber mails the previous one back to Netflix in a prepaid mailing envelope. Upon receipt of the disc, Netflix ships the next available disc in the subscriber's rental queue.

As of July 24, 2007, Netflix's most popular plan costs US $16.99 (plus tax) per month, allowing a subscriber to check out up to 3 DVDs at a time. Other monthly plans range from US $4.99 for one disc at a time and a limit of two per month to US $47.99 for eight, unlimited exchange. For the three-out plan and up, each rental slot costs the subscriber approximately US $6 a month. Netflix also sells gift subscriptions for various intervals, although the recipient needs a credit/debit card.