Document And Entity Information

3 Months Ended

Mar. 31, 2015

Document And Entity Information [Abstract]

Entity Registrant Name

NETFLIX INC

Entity Central Index Key

0001065280

Current Fiscal Year End Date

--12-31

Entity Filer Category

Large Accelerated Filer

Document Type

10-Q

Document Period End Date

Mar. 31, 2015

Document Fiscal Year Focus

2015

Document Fiscal Period Focus

Q1

Amendment Flag

false

Entity Common Stock, Shares Outstanding

60,620,721

Consolidated Statements Of Operations (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Income Statement [Abstract]

Revenues

$ 1,573,129

$ 1,270,089

Cost of revenues

1,046,401

869,186

Marketing

194,677

137,098

Technology and development

143,106

110,310

General and administrative

91,489

55,900

Operating income

97,456

97,595

Other income (expense):

Interest expense

(26,737)

(10,052)

Interest and other income (expense)

(32,293)

1,401

Income before income taxes

38,426

88,944

Provision for income taxes

14,730

35,829

Net income

$ 23,696

$ 53,115

Earnings per share:

Basic (in dollars per share)

$ 0.39

$ 0.89

Diluted (in dollars per share)

$ 0.38

$ 0.86

Weighted-average common shares outstanding:

Basic (in shares)

60,518

59,817

Diluted (in shares)

61,973

61,548

Consolidated Statements of Comprehensive Income (USD $)

In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Statement of Comprehensive Income [Abstract]

Net income

$ 23,696

$ 53,115

Other comprehensive income (loss):

Foreign currency translation adjustments

(39,490)

461

Change in unrealized gains on available-for-sale securities, net of tax of $133 and $291, respectively

782

467

Total other comprehensive (loss) income

(38,708)

928

Comprehensive (loss) income

$ (15,012)

$ 54,043

Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Statement of Comprehensive Income [Abstract]

Change in unrealized gains (losses) on available-for-sale securities, tax

$ 133

$ 291

Consolidated Statements Of Cash Flows (USD $)

In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Cash flows from operating activities:

Net income

$ 23,696

$ 53,115

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Additions to streaming content library

(1,611,925)

(749,399)

Change in streaming content liabilities

626,325

42,244

Amortization of streaming content library

749,518

600,735

Amortization of DVD content library

21,185

16,121

Depreciation and amortization of property, equipment and intangibles

15,167

12,382

Stock-based compensation expense

27,441

25,825

Excess tax benefits from stock-based compensation

(29,001)

(32,732)

Other non-cash items

6,306

2,196

Deferred taxes

(37,042)

(13,103)

Changes in operating assets and liabilities:

Other current assets

23,109

35,066

Accounts payable

(10,625)

22,812

Accrued expenses

35,922

(442)

Deferred revenue

10,754

14,248

Other non-current assets and liabilities

21,788

7,291

Net cash (used in) provided by operating activities

(127,382)

36,359

Cash flows from investing activities:

Acquisition of DVD content library

(22,906)

(14,914)

Purchases of property and equipment

(13,036)

(13,334)

Other assets

225

295

Purchases of short-term investments

(90,940)

(60,546)

Proceeds from sale of short-term investments

51,948

143,048

Proceeds from maturities of short-term investments

31,887

3,090

Net cash (used in) provided by investing activities

(42,822)

57,639

Cash flows from financing activities:

Proceeds from issuance of common stock

10,916

32,448

Proceeds from issuance of debt

1,500,000

400,000

Issuance costs

(17,232)

(6,727)

Excess tax benefits from stock-based compensation

29,001

32,732

Principal payments of lease financing obligations

(251)

(267)

Net cash provided by financing activities

1,522,434

458,186

Effect of exchange rate changes on cash and cash equivalents

(11,061)

301

Net increase in cash and cash equivalents

1,341,169

552,485

Cash and cash equivalents, beginning of period

1,113,608

604,965

Cash and cash equivalents, end of period

$ 2,454,777

$ 1,157,450

Consolidated Balance Sheets (USD $)

In Thousands, unless otherwise specified

Mar. 31, 2015

Dec. 31, 2014

Current assets:

Cash and cash equivalents

$ 2,454,777

$ 1,113,608

Short-term investments

502,931

494,888

Current content library, net

2,370,447

2,125,702

Other current assets

210,901

206,271

Total current assets

5,539,056

3,940,469

Non-current content library, net

3,312,353

2,773,326

Property and equipment, net

145,816

149,875

Other non-current assets

243,401

192,981

Total assets

9,240,626

7,056,651

Current liabilities:

Current content liabilities

2,425,619

2,117,241

Accounts payable

190,567

201,581

Accrued expenses

107,323

69,746

Deferred revenue

285,340

274,586

Total current liabilities

3,008,849

2,663,154

Non-current content liabilities

1,861,791

1,575,832

Long-term debt

2,400,000

900,000

Other non-current liabilities

60,772

59,957

Total liabilities

7,331,412

5,198,943

Commitments and contingencies (Note 9)

Stockholders’ equity:

Common stock, $0.001 par value; 160,000,000 shares authorized at March 31, 2015 and December 31, 2014; 60,620,721 and 60,415,841 issued and outstanding at March 31, 2015 and December 31, 2014, respectively

61

60

Additional paid-in capital

1,109,327

1,042,810

Accumulated other comprehensive loss

(43,154)

(4,446)

Retained earnings

842,980

819,284

Total stockholders’ equity

1,909,214

1,857,708

Total liabilities and stockholders’ equity

$ 9,240,626

$ 7,056,651

Consolidated Balance Sheets (Parenthetical) (USD $)

Mar. 31, 2015

Dec. 31, 2014

Statement of Financial Position [Abstract]

Common stock, par value

$ 0.001

Common stock, shares authorized

160,000,000

Common stock, shares issued

60,620,721

60,415,841

Common stock, shares outstanding

60,620,721

60,415,841

Basis of Presentation and Summary of Significant Accounting Policies

The accompanying consolidated interim financial statements of Netflix, Inc. and its wholly owned subsidiaries (the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.”) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission (the “SEC”) on January 29, 2015. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the streaming content library amortization policy; the recognition and measurement of income tax assets and liabilities; and the valuation of stock-based compensation. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments and estimates. Actual results may differ from these estimates.

The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Interim results are not necessarily indicative of the results for a full year.

The Company has three reportable segments: Domestic streaming, International streaming and Domestic DVD. A majority of the Company’s revenues are generated in the United States, and substantially all of the Company’s long-lived tangible assets are held in the United States. The Company’s revenues are derived from monthly membership fees.

There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Prior to January 1, 2015, the functional currency of certain of the Company's European entities was the British pound. The Company changed the functional currency of these entities to the euro effective January 1, 2015 following the redomiciliation of the European headquarters and the launch of the Netflix service in several significant European countries. The change in functional currency was applied prospectively from January 1, 2015. Monetary assets and liabilities have been remeasured to the euro at current exchange rates. Non-monetary assets and liabilities have been remeasured to the euro using the exchange rate effective for the period in which the balance arose. As a result of this change of functional currency, the Company recorded a $21.8 million cumulative translation adjustment included in other comprehensive loss for the quarter ended March 31, 2015.

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, but does not expect the impact to be material.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated balance sheets.

Earnings Per Share

Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential common shares outstanding during the period. Potential common shares consist of incremental shares issuable upon the assumed exercise of stock options. The computation of earnings per share is as follows:



	Three Months Ended
	March 31, 2015		March 31, 2014
	(in thousands, except per share data)
Basic earnings per share:
Net income	$	23,696	$	53,115
Shares used in computation:
Weighted-average common shares outstanding	60,518		59,817
Basic earnings per share	$	0.39	$	0.89

Diluted earnings per share:
Net income	$	23,696	$	53,115
Shares used in computation:
Weighted-average common shares outstanding	60,518		59,817
Employee stock options	1,455		1,731
Weighted-average number of shares	61,973		61,548
Diluted earnings per share	$	0.38	$	0.86

Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive. The following table summarizes the potential common shares excluded from the diluted calculation:



	Three Months Ended
	March 31, 2015	March 31, 2014
	(in thousands)
Employee stock options	256	41

Short-term Investments

The Company’s investment policy is consistent with the definition of available-for-sale securities. The Company does not buy and hold securities principally for the purpose of selling them in the near future. The Company’s policy is focused on the preservation of capital, liquidity and return. From time to time, the Company may sell certain securities but the objectives are generally not to generate profits on short-term differences in price. The following tables summarize, by major security type, the Company’s assets that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy and where they are classified on the Consolidated Balance Sheets:



	As of March 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash	$	2,354,639	$	—	$	—		$	2,354,639
Level 1 securities:
Money market funds	105,060		—		—			105,060
Level 2 securities:
Corporate debt securities	270,196		726		(49		)	270,873
Government securities	198,815		479		(5		)	199,289
Certificate of deposits and commercial paper	6,100		—		—			6,100
Agency securities	26,644		25		—			26,669
Total	$	2,961,454	$	1,230	$	(54	)	$	2,962,630



	As of December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash	$	1,007,543	$	—	$	—		$	1,007,543
Level 1 securities:
Money market funds	111,759		—		—			111,759
Level 2 securities:
Corporate debt securities	295,500		432		(199		)	295,733
Government securities	168,749		120		(95		)	168,774
Asset and mortgage-backed securities	112		—		—			112
Certificate of deposits	3,600		—		—			3,600
Agency securities	26,665		5		(1		)	26,669
Total	$	1,613,928	$	557	$	(295	)	$	1,614,190



	As of
	March 31, 2015		December 31, 2014
	(in thousands)
Cash and cash equivalents	$	2,454,777	$	1,113,608
Short-term investments	502,931		494,888
Other non-current assets (1)	4,922		5,694
Total	$	2,962,630	$	1,614,190

(1) Primarily restricted cash that is related to workers compensation deposits.

Fair value is a market-based measurement that is determined based on the assumptions that market participants would use in pricing an asset or liability. The hierarchy level assigned to each security in the Company’s available-for-sale portfolio and cash equivalents is based on its assessment of the transparency and reliability of the inputs used in the valuation of such instrument at the measurement date. The fair value of available-for-sale securities and cash equivalents included in the Level 1 category is based on quoted prices that are readily and regularly available in an active market. The fair value of available-for-sale securities included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. These values were obtained from an independent pricing service and were evaluated using pricing models that vary by asset class and may incorporate available trade, bid and other market information and price quotes from well-established independent pricing vendors and broker-dealers. The Company's procedures include controls to ensure that appropriate fair values are recorded, such as comparing prices obtained from multiple independent sources. See Note 5 to the consolidated financial statements for further information regarding the fair value of the Company’s debt instruments.

There were no investments in a material unrealized loss position as of March 31, 2015 or December 31, 2014. There were no material other-than-temporary impairments or credit losses related to available-for-sale securities in the three months ended March 31, 2015 and 2014. In addition, there were no material gross realized gains or losses in the three months ended March 31, 2015 and 2014.

The estimated fair value of short-term investments by contractual maturity as of March 31, 2015 is as follows:



	(in thousands)
Due within one year	$	168,017
Due after one year and through five years	334,914
Total short-term investments	$	502,931

Balance Sheet Components

Content Library

Content library consisted of the following:



	As of
	March 31, 2015			December 31, 2014
	(in thousands)
Total content library, gross	$	9,239,372		$	8,497,403
Accumulated amortization	(3,556,572		)	(3,598,375		)
Total content library, net	5,682,800			4,899,028
Current content library, net	2,370,447			2,125,702
Non-current content library, net	$	3,312,353		$	2,773,326

Content library includes costs capitalized for licensed streaming content, for production of original content and for DVD content.

Property and Equipment, Net

Property and equipment and accumulated depreciation consisted of the following:



	As of
	March 31, 2015			December 31, 2014			Estimated Useful Lives
	(in thousands)
Information technology assets	$	189,059		$	189,274		3 years
Furniture and fixtures	26,707			25,758			3 years
Building	40,681			40,681			30 years
Leasehold improvements	59,830			57,339			Over life of lease
DVD operations equipment	89,137			89,144			5 years
Capital work-in-progress	17,641			12,495
Property and equipment, gross	423,055			414,691
Less: Accumulated depreciation	(277,239		)	(264,816		)
Property and equipment, net	$	145,816		$	149,875

Long-term Debt

As of March 31, 2015, the Company had aggregate outstanding principal of $2.4 billion in long-term notes with varying maturities (the "Notes"). Each of the Notes were issued at par and are senior unsecured obligations of the Company. Interest is payable semi-annually at fixed rates.

The following table provides a summary of the Company's long-term debt as of March 31, 2015 and December 31, 2014:



						Level 2 Fair Value (1) as of
	Principal Amount at Par		Issuance Date	Maturity	Interest Due Dates	March 31, 2015		December 31, 2014
	(in millions)					(in millions)
5.375% Senior Notes	$	500.0	February 2013	2021	February 1 and August 1	$	510.0	$	520.0
5.750% Senior Notes	400.0		February 2014	2024	March 1 and September 1	407.5		416.0
5.50% Senior Notes (2)	700.0		February 2015	2022	April 15 and October 15	715.8		—
5.875% Senior Notes (2)	800.0		February 2015	2025	April 15 and October 15	821.0		—

(1) Based on quoted market prices in less active markets

(2)

The net proceeds to the Company for the 5.50% and 5.875% Senior Notes issued in the first quarter of 2015 were an aggregate $1,482.4 million. Debt issuance costs of $17.6 million (of which $0.4 million were unpaid as of March 31, 2015) were recorded in "Other non-current assets" on the Consolidated Balance Sheets and are amortized over the term of the notes as "Interest expense" on the Consolidated Statements of Operations.

Each of the Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to 101% of the principal plus accrued interest. The Company may redeem the Notes prior to maturity in whole or in part at an amount equal to the principal amount thereof plus accrued and unpaid interest and an applicable premium. The Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens; enter into sale and lease-back transactions; create, assume, incur or guarantee additional indebtedness of certain of the Company's subsidiaries; and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person. As of March 31, 2015 and December 31, 2014, the Company was in compliance with all related covenants.

Stockholders' Equity

Stockholders’ Equity

Stock Option Plan

In June 2011, the Company adopted the 2011 Stock Plan. The 2011 Stock Plan provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants. As of March 31, 2015, 2.7 million shares were reserved for future grants under the 2011 Stock Plan.

A summary of the activities related to the Company’s stock option plans is as follows:



			Options Outstanding
	Shares Available for Grant		Number of Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in Thousands)
Balances as of December 31, 2014	2,860,744		3,263,631		$	151.53
Granted	(148,156	)	148,156		417.43
Exercised			(204,880	)	50.12
Balances as of March 31, 2015	2,712,588		3,206,907		$	170.29	6.30	$	801,626
Vested and exercisable as of March 31, 2015			3,206,907		$	170.29	6.30	$	801,626

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first quarter of 2015 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of the first quarter of 2015. This amount changes based on the fair market value of the Company’s common stock. The total intrinsic value of options exercised for the three months ended March 31, 2015 and 2014 was $80.8 million and $101.5 million, respectively.

Cash received from option exercises for the three months ended March 31, 2015 and 2014 was $10.9 million and $32.4 million, respectively.

Stock-based Compensation

The following table summarizes the assumptions used to value stock option grants using the lattice-binomial model and the valuation data:



	Three Months Ended
	March 31, 2015			March 31, 2014
Dividend yield	—		%	—		%
Expected volatility	36		%	48		%
Risk-free interest rate	2.03		%	2.83		%
Suboptimal exercise factor	2.48			2.66 - 4.07
Valuation data:
Weighted-average fair value (per share)	$	185.22		$	221.79
Total stock-based compensation expense (in thousands)	$	27,441		$	25,825
Total income tax benefit related to stock options (in thousands)	$	10,392		$	9,899

The Company considers several factors in determining the suboptimal exercise factor, including the historical and estimated option exercise behavior and the employee groupings. Prior to January 1, 2015, the Company bifurcated its option grants into two employee groupings (executive and non-executive) to determine the suboptimal exercise factor. Beginning on January 1, 2015, the Company began aggregating employee groupings for its determination of the suboptimal exercise factor as the previous bifurcation into two groupings did not have a material impact on the fair value of the options granted.

Prior to January 1, 2015, the Company's computation of expected volatility was based on a blend of historical volatility of its common stock and implied volatility of tradable forward call options to purchase shares of its common stock, as low trade volume of its tradable forward call options prior to 2011 precluded sole reliance on implied volatility. Beginning on January 1, 2015, expected volatility is based solely on implied volatility. The Company believes that implied volatility of publicly traded options in its common stock is more reflective of market conditions, and given consistently high trade volumes of the options, can reasonably be expected to be a better indicator of expected volatility than historical volatility of its common stock.

In valuing shares issued under the Company’s employee stock option plans, the Company bases the risk-free interest rate on U.S. Treasury zero-coupon issues with terms similar to the contractual term of the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. The Company does not use a post-vesting termination rate as options are fully vested upon grant date.

Accumulated Other Comprehensive Loss

The following table summarizes the changes in the accumulated balance of other comprehensive loss, net of tax, for the three months ended March 31, 2015:



	Foreign currency			Change in unrealized gains on available-for-sale securities			Total
	(in thousands)
Balance as of December 31, 2014	$	(4,615	)	$	169		$	(4,446	)
Other comprehensive (loss) income before reclassifications	(39,490		)	846			(38,644		)
Amounts reclassified from accumulated other comprehensive loss	—			(64		)	(64		)
Net increase (decrease) in other comprehensive (loss) income	(39,490		)	782			(38,708		)
Balance as of March 31, 2015	$	(44,105	)	$	951		$	(43,154	)

As discussed in Note 1, other comprehensive loss for the three months ended March 31, 2015 includes the impact of the change in functional currency for certain of the Company's European entities.

All amounts reclassified from accumulated other comprehensive loss were related to realized gains on available-for-sale securities. These reclassifications impacted "Interest and other income (expense)" on the Consolidated Statements of Operations.

Income Taxes

The effective tax rates for the three months ended March 31, 2015 and 2014 were 38% and 40%, respectively. The effective tax rates for the three months ended March 31, 2015 differed from the federal statutory rate primarily due to state taxes, foreign taxes and non-deductible expenses, partially offset by the California R&D credit. The effective tax rates for the three months ended March 31, 2014 differed from the federal statutory rate primarily due to state taxes, foreign taxes and non-deductible expenses, partially offset by the California R&D credit.

The decrease in the Company's effective tax rates for the three months ended March 31, 2015 as compared to the three months ended March 31, 2014 was primarily attributable to lower tax reserves on uncertain tax positions following an IRS Appeals settlement in the fourth quarter of 2014.

Gross unrecognized tax benefits were $38.2 million and $34.8 million as of March 31, 2015 and December 31, 2014, respectively. The gross unrecognized tax benefits, if recognized by the Company, will result in a reduction of approximately $31.8 million to the provision for income taxes thereby favorably impacting the Company’s effective tax rate. The Company’s unrecognized tax benefits are classified as “Other non-current liabilities” on the Consolidated Balance Sheets. The Company includes interest and penalties related to unrecognized tax benefits within the "Provision for income taxes" on the Consolidated Statements of Operations. As of March 31, 2015, the total amount of gross interest and penalties accrued was $0.5 million, and is classified as “Other non-current liabilities” on the Consolidated Balance Sheets.

Deferred tax assets include $14.0 million and $13.4 million classified as “Other current assets” and $143.3 million and $106.9 million classified as “Other non-current assets” on the Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014, respectively. In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. As of March 31, 2015 and December 31, 2014, it was considered more likely than not that all deferred tax assets would be realized.

Income tax benefits attributable to the exercise of employee stock options of $28.8 million and $32.5 million, during the three months ended March 31, 2015 and 2014, respectively, were recorded directly to "Additional paid-in capital" on the Consolidated Balance Sheets.

The Company files U.S. federal, state and foreign tax returns. The Company is currently under examination by the IRS for the years 2010 through 2013.

The Company is also currently under examination by the state of California for the years 2006 and 2007. California has completed its Field Exam of the 2006 and 2007 California tax returns and has issued a Notice of Proposed Assessment primarily related to the Company's R&D Credits claimed in those years. The Company has filed a protest against the proposed assessment and is currently in the midst of the Franchise Tax Board Protest process. The years 1997 through 2005, as well as 2008 through 2013 remain subject to examination by the state of California.

The Company has no significant foreign jurisdiction audits underway. The years 2010 through 2014 remain subject to examination by foreign jurisdictions.

Given the potential outcome of the current examinations, as well as the impact of the current examination on the potential expiration of the statute of limitations, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months. However, at this time, an estimate of the range of reasonably possible adjustments to the balance of unrecognized tax benefits cannot be made.

Commitments and Contingencies

Streaming Content

As of March 31, 2015, the Company had $9.8 billion of obligations comprised of $2.4 billion included in "Current content liabilities" and $1.9 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $5.5 billion of obligations that are not reflected on the Consolidated Balance Sheets.

As of December 31, 2014, the Company had $9.5 billion of obligations comprised of $2.1 billion included in "Current content liabilities" and $1.6 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $5.8 billion of obligations that are not reflected on the Consolidated Balance Sheets.

The expected timing of payments for these streaming content obligations is as follows:



	As of
	March 31, 2015		December 31, 2014
	(in thousands)
Less than one year	$	4,016,950	$	3,747,648
Due after one year and through three years	4,634,792		4,495,103
Due after three years and through five years	1,071,291		1,164,308
Due after five years	57,229		44,053
Total streaming content obligations	$	9,780,262	$	9,451,112

A streaming content obligation is incurred at the time the Company enters into an agreement to obtain future titles. Once a title becomes available, a content liability is generally recorded on the Consolidated Balance Sheets. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date. The Company does not include any estimated obligation for these future titles beyond the known minimum amount. However, the unknown obligations are expected to be significant and the expected timing of payments could range from less than one year to more than five years.

The Company has entered into certain licenses with performing rights organizations ("PROs"), and is currently involved in negotiations with other PROs, that hold certain rights to music and other entertainment works "publicly performed" in connection with streaming content into various territories. Accruals for estimated license fees are recorded and then adjusted based on any change in estimates. These amounts are included in the streaming content obligations. The results of these negotiations are uncertain and may be materially different from management's estimates.

Legal Proceedings

From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims, including claims relating to employee relations, business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict and the Company's view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial position, liquidity or results of operations.

On January 13, 2012, the first of three purported shareholder class action lawsuits was filed in the United States District Court for the Northern District of California against the Company and certain of its officers and directors. Two additional purported shareholder class action lawsuits were filed in the same court on January 27, 2012 and February 29, 2012 alleging substantially similar claims. These lawsuits were consolidated into In re Netflix, Inc., Securities Litigation, Case No. 3:12-cv-00225-SC, and the Court selected lead plaintiffs. On June 26, 2012, lead plaintiffs filed a consolidated complaint which alleged violations of the federal securities laws. The Court dismissed the consolidated complaint with leave to amend on February 13, 2013. Lead plaintiffs filed a first amended consolidated complaint on March 22, 2013. The Court dismissed the first amended consolidated complaint with prejudice on August 20, 2013, and judgment was entered on September 27, 2013. Lead plaintiffs filed a motion to alter or amend the judgment and requested leave to file a second amended complaint on October 25, 2013. On January 17, 2014, the Court denied that motion. On February 18, 2014, lead plaintiffs appealed that decision to the United States Court of Appeals for the Ninth Circuit. Management has determined a potential loss is reasonably possible however, based on its current knowledge, management does not believe that the amount of such possible loss or a range of potential loss is reasonably estimable

On November 23, 2011, the first of six purported shareholder derivative suits was filed in the Superior Court of California, Santa Clara County, against the Company and certain of its officers and directors. Five additional purported shareholder derivative suits were subsequently filed: two in the Superior Court of California, Santa Clara County on February 9, 2012 and May 2, 2012; and three in the United States District Court for the Northern District of California on February 13, 2012, February 24, 2012 and April 2, 2012. The purported shareholder derivative suits filed in the Northern District of California have been voluntarily dismissed. On July 5, 2012, the purported shareholder derivative suits filed in Santa Clara County were consolidated into In re Netflix, Inc. Shareholder Derivative Litigation, Case No. 1-12-cv-218399, and lead counsel was appointed. A consolidated complaint was filed on December 4, 2012, with plaintiffs seeking compensatory damages and other relief. The consolidated complaint alleges, among other things, that certain of the Company's current and former officers and directors breached their fiduciary duties, issued false and misleading statements primarily regarding the Company's streaming business, violated accounting rules concerning segment reporting, violated provisions of the California Corporations Code, and wasted corporate assets. The consolidated complaint further alleges that the defendants caused the Company to buy back stock at artificially inflated prices to the detriment of the Company and its shareholders while contemporaneously selling personally held Company stock. The Company filed a demurrer to the consolidated complaint and a motion to stay the derivative litigation in favor of the related federal securities class action on February 4, 2013. On June 21, 2013, the Court granted the motion to stay the derivative litigation pending resolution of the related federal securities class action. Management has determined a potential loss is reasonably possible however, based on its current knowledge, management does not believe that the amount of such possible loss or a range of potential loss is reasonably estimable.

The Company is involved in other litigation matters not listed above but does not consider the matters to be material either individually or in the aggregate at this time. The Company's view of the matters not listed may change in the future as the litigation and events related thereto unfold.

Indemnification

In the ordinary course of business, the Company has entered into contractual arrangements under which it has agreed to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements and out of intellectual property infringement claims made by third parties. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract.

The Company's obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations vary.

It is not possible to make a reasonable estimate of the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. No amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification obligations.

Segment Information

The Company has three reportable segments: Domestic streaming, International streaming and Domestic DVD. Segment information is presented in the same manner that the Company’s chief operating decision maker ("CODM") reviews the operating results in assessing performance and allocating resources. The Company’s CODM reviews revenues and contribution profit (loss) for each of the reportable segments. Contribution profit (loss) is defined as revenues less cost of revenues and marketing expenses directly incurred by the segment. The Company has aggregated the results of the International operating segments into one reportable segment because these operating segments share similar long-term economic and other qualitative characteristics.

The Domestic and International streaming segments derive revenues from monthly membership fees for services consisting solely of streaming content. The Domestic DVD segment derives revenues from monthly membership fees for services consisting solely of DVD-by-mail. Revenues and the related payment card fees are attributed to the operating segment based on the nature of the underlying membership (streaming or DVD) and the geographic region from which the membership originates. There are no internal revenue transactions between the Company’s segments.

Cost of revenues are primarily attributed to the operating segment based on the amounts directly incurred by the segment to obtain content and deliver it to the specific region. Content rights increasingly include multiple geographies as the Company aspires to obtain global content rights to support global expansion. The Company allocates this content between the International and Domestic segments based on estimated fair market value. Marketing expenses are primarily comprised of advertising expenses which are generally included in the segment in which the expenditures are directly incurred.

The Company's long-lived tangible assets were located as follows:



	As of
	March 31, 2015		December 31, 2014
	(in thousands)
United States	$	135,080	$	138,704
International	10,736		11,171

The following table represents segment information for the quarter ended March 31, 2015:



	As of/ Three months ended March 31, 2015
	Domestic Streaming		International Streaming			Domestic DVD		Consolidated
	(in thousands)
Total memberships at end of period (1)	41,397		20,877			5,564		—
Revenues	$	984,532	$	415,397		$	173,200	$	1,573,129
Cost of revenues	582,529		375,278			88,594		1,046,401
Marketing	89,551		105,126			—		194,677
Contribution profit (loss)	$	312,452	$	(65,007	)	$	84,606	$	332,051
Other operating expenses								234,595
Operating income								97,456
Other income (expense)								(59,030		)
Provision for income taxes								14,730
Net income								$	23,696

The following table represents segment information for the quarter ended March 31, 2014:



	As of/ Three months ended March 31, 2014
	Domestic Streaming		International Streaming			Domestic DVD		Consolidated
	(in thousands)
Total memberships at end of period (1)	35,674		12,683			6,652		—
Revenues	$	798,617	$	267,118		$	204,354	$	1,270,089
Cost of revenues	517,094		245,267			106,825		869,186
Marketing	80,258		56,840			—		137,098
Contribution profit (loss)	$	201,265	$	(34,989	)	$	97,529	$	263,805
Other operating expenses								166,210
Operating income								97,595
Other income (expense)								(8,651		)
Provision for income taxes								35,829
Net income								$	53,115

The following table represents the amortization of the content library:



	Domestic Streaming		International Streaming		Domestic DVD		Consolidated
Three months ended March 31,	(in thousands)
2015	$	431,989	$	317,529	$	21,185	$	770,703
2014	386,315		214,420		16,121		616,856

The following table represents total content library, net:



	Domestic Streaming		International Streaming		Domestic DVD		Consolidated
	(in thousands)
As of March 31, 2015	$	3,966,867	$	1,685,671	$	30,262	$	5,682,800
As of December 31, 2014	3,476,226		1,392,701		30,101		4,899,028

(1)

A membership (also referred to as a subscription or member) is defined as the right to receive either the Netflix streaming service or Netflix DVD service. Memberships are assigned to territories based on the geographic location used at time of sign up as determined by the Company's internal systems, which utilize industry standard geo-location technology. The Company offers free-trial memberships to new and certain rejoining members. For inclusion in the definition of a membership in the above metrics, a method of payment is required to be provided even during the free-trial period. Total memberships therefore include those who are on a free-trial and have provided a method of payment. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations become effective at the end of the prepaid membership period, while involuntary cancellation of the service, as a result of a failed method of payment, becomes effective immediately.

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the streaming content library amortization policy; the recognition and measurement of income tax assets and liabilities; and the valuation of stock-based compensation. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments and estimates. Actual results may differ from these estimates.

Earnings Per Share (Tables)

Computation Of Net Income Per Share

The computation of earnings per share is as follows:



	Three Months Ended
	March 31, 2015		March 31, 2014
	(in thousands, except per share data)
Basic earnings per share:
Net income	$	23,696	$	53,115
Shares used in computation:
Weighted-average common shares outstanding	60,518		59,817
Basic earnings per share	$	0.39	$	0.89

Diluted earnings per share:
Net income	$	23,696	$	53,115
Shares used in computation:
Weighted-average common shares outstanding	60,518		59,817
Employee stock options	1,455		1,731
Weighted-average number of shares	61,973		61,548
Diluted earnings per share	$	0.38	$	0.86

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following table summarizes the potential common shares excluded from the diluted calculation:



	Three Months Ended
	March 31, 2015	March 31, 2014
	(in thousands)
Employee stock options	256	41

Short-term Investments (Tables)

Available-For-Sale Securities Reported At Fair Value

The following tables summarize, by major security type, the Company’s assets that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy and where they are classified on the Consolidated Balance Sheets:



	As of March 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash	$	2,354,639	$	—	$	—		$	2,354,639
Level 1 securities:
Money market funds	105,060		—		—			105,060
Level 2 securities:
Corporate debt securities	270,196		726		(49		)	270,873
Government securities	198,815		479		(5		)	199,289
Certificate of deposits and commercial paper	6,100		—		—			6,100
Agency securities	26,644		25		—			26,669
Total	$	2,961,454	$	1,230	$	(54	)	$	2,962,630



	As of December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash	$	1,007,543	$	—	$	—		$	1,007,543
Level 1 securities:
Money market funds	111,759		—		—			111,759
Level 2 securities:
Corporate debt securities	295,500		432		(199		)	295,733
Government securities	168,749		120		(95		)	168,774
Asset and mortgage-backed securities	112		—		—			112
Certificate of deposits	3,600		—		—			3,600
Agency securities	26,665		5		(1		)	26,669
Total	$	1,613,928	$	557	$	(295	)	$	1,614,190



	As of
	March 31, 2015		December 31, 2014
	(in thousands)
Cash and cash equivalents	$	2,454,777	$	1,113,608
Short-term investments	502,931		494,888
Other non-current assets (1)	4,922		5,694
Total	$	2,962,630	$	1,614,190

(1) Primarily restricted cash that is related to workers compensation deposits.

Estimated Fair Value Of Short-Term Investments By Contractual Maturity

The estimated fair value of short-term investments by contractual maturity as of March 31, 2015 is as follows:



	(in thousands)
Due within one year	$	168,017
Due after one year and through five years	334,914
Total short-term investments	$	502,931

Balance Sheet Components (Tables)

Content Library

Content library consisted of the following:



	As of
	March 31, 2015			December 31, 2014
	(in thousands)
Total content library, gross	$	9,239,372		$	8,497,403
Accumulated amortization	(3,556,572		)	(3,598,375		)
Total content library, net	5,682,800			4,899,028
Current content library, net	2,370,447			2,125,702
Non-current content library, net	$	3,312,353		$	2,773,326

Property and Equipment, Net

Property and equipment and accumulated depreciation consisted of the following:



	As of
	March 31, 2015			December 31, 2014			Estimated Useful Lives
	(in thousands)
Information technology assets	$	189,059		$	189,274		3 years
Furniture and fixtures	26,707			25,758			3 years
Building	40,681			40,681			30 years
Leasehold improvements	59,830			57,339			Over life of lease
DVD operations equipment	89,137			89,144			5 years
Capital work-in-progress	17,641			12,495
Property and equipment, gross	423,055			414,691
Less: Accumulated depreciation	(277,239		)	(264,816		)
Property and equipment, net	$	145,816		$	149,875

Long-term Debt (Tables)

Summary of Long-term Debt

The following table provides a summary of the Company's long-term debt as of March 31, 2015 and December 31, 2014:



						Level 2 Fair Value (1) as of
	Principal Amount at Par		Issuance Date	Maturity	Interest Due Dates	March 31, 2015		December 31, 2014
	(in millions)					(in millions)
5.375% Senior Notes	$	500.0	February 2013	2021	February 1 and August 1	$	510.0	$	520.0
5.750% Senior Notes	400.0		February 2014	2024	March 1 and September 1	407.5		416.0
5.50% Senior Notes (2)	700.0		February 2015	2022	April 15 and October 15	715.8		—
5.875% Senior Notes (2)	800.0		February 2015	2025	April 15 and October 15	821.0		—

(1) Based on quoted market prices in less active markets

(2)

The net proceeds to the Company for the 5.50% and 5.875% Senior Notes issued in the first quarter of 2015 were an aggregate $1,482.4 million. Debt issuance costs of $17.6 million (of which $0.4 million were unpaid as of March 31, 2015) were recorded in "Other non-current assets" on the Consolidated Balance Sheets and are amortized over the term of the notes as "Interest expense" on the Consolidated Statements of Operations.

Stockholders' Equity (Tables)

Summary Of Activity Related To Stock Option Plans

A summary of the activities related to the Company’s stock option plans is as follows:



			Options Outstanding
	Shares Available for Grant		Number of Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in Thousands)
Balances as of December 31, 2014	2,860,744		3,263,631		$	151.53
Granted	(148,156	)	148,156		417.43
Exercised			(204,880	)	50.12
Balances as of March 31, 2015	2,712,588		3,206,907		$	170.29	6.30	$	801,626
Vested and exercisable as of March 31, 2015			3,206,907		$	170.29	6.30	$	801,626

Summary Of Assumptions Used To Value Stock Option Grants Using Lattice-Binomial Model

The following table summarizes the assumptions used to value stock option grants using the lattice-binomial model and the valuation data:



	Three Months Ended
	March 31, 2015			March 31, 2014
Dividend yield	—		%	—		%
Expected volatility	36		%	48		%
Risk-free interest rate	2.03		%	2.83		%
Suboptimal exercise factor	2.48			2.66 - 4.07
Valuation data:
Weighted-average fair value (per share)	$	185.22		$	221.79
Total stock-based compensation expense (in thousands)	$	27,441		$	25,825
Total income tax benefit related to stock options (in thousands)	$	10,392		$	9,899

Accumulated Other Comprehensive Loss (Tables)

Schedule of Changes in Accumulated Other Comprehensive Income

The following table summarizes the changes in the accumulated balance of other comprehensive loss, net of tax, for the three months ended March 31, 2015:



	Foreign currency			Change in unrealized gains on available-for-sale securities			Total
	(in thousands)
Balance as of December 31, 2014	$	(4,615	)	$	169		$	(4,446	)
Other comprehensive (loss) income before reclassifications	(39,490		)	846			(38,644		)
Amounts reclassified from accumulated other comprehensive loss	—			(64		)	(64		)
Net increase (decrease) in other comprehensive (loss) income	(39,490		)	782			(38,708		)
Balance as of March 31, 2015	$	(44,105	)	$	951		$	(43,154	)

Commitments and Contingencies (Tables)

Expected Timing Of Payments For Commitments

The expected timing of payments for these streaming content obligations is as follows:



	As of
	March 31, 2015		December 31, 2014
	(in thousands)
Less than one year	$	4,016,950	$	3,747,648
Due after one year and through three years	4,634,792		4,495,103
Due after three years and through five years	1,071,291		1,164,308
Due after five years	57,229		44,053
Total streaming content obligations	$	9,780,262	$	9,451,112

Segment Information (Tables)

Long-lived Assets by Geographic Areas

The Company's long-lived tangible assets were located as follows:



	As of
	March 31, 2015		December 31, 2014
	(in thousands)
United States	$	135,080	$	138,704
International	10,736		11,171

Information on Reportable Segments And Reconciliation To Consolidated Net Income

The following table represents segment information for the quarter ended March 31, 2015:



	As of/ Three months ended March 31, 2015
	Domestic Streaming		International Streaming			Domestic DVD		Consolidated
	(in thousands)
Total memberships at end of period (1)	41,397		20,877			5,564		—
Revenues	$	984,532	$	415,397		$	173,200	$	1,573,129
Cost of revenues	582,529		375,278			88,594		1,046,401
Marketing	89,551		105,126			—		194,677
Contribution profit (loss)	$	312,452	$	(65,007	)	$	84,606	$	332,051
Other operating expenses								234,595
Operating income								97,456
Other income (expense)								(59,030		)
Provision for income taxes								14,730
Net income								$	23,696

The following table represents segment information for the quarter ended March 31, 2014:



	As of/ Three months ended March 31, 2014
	Domestic Streaming		International Streaming			Domestic DVD		Consolidated
	(in thousands)
Total memberships at end of period (1)	35,674		12,683			6,652		—
Revenues	$	798,617	$	267,118		$	204,354	$	1,270,089
Cost of revenues	517,094		245,267			106,825		869,186
Marketing	80,258		56,840			—		137,098
Contribution profit (loss)	$	201,265	$	(34,989	)	$	97,529	$	263,805
Other operating expenses								166,210
Operating income								97,595
Other income (expense)								(8,651		)
Provision for income taxes								35,829
Net income								$	53,115

The following table represents the amortization of the content library:



	Domestic Streaming		International Streaming		Domestic DVD		Consolidated
Three months ended March 31,	(in thousands)
2015	$	431,989	$	317,529	$	21,185	$	770,703
2014	386,315		214,420		16,121		616,856

The following table represents total content library, net:



	Domestic Streaming		International Streaming		Domestic DVD		Consolidated
	(in thousands)
As of March 31, 2015	$	3,966,867	$	1,685,671	$	30,262	$	5,682,800
As of December 31, 2014	3,476,226		1,392,701		30,101		4,899,028

(1)

A membership (also referred to as a subscription or member) is defined as the right to receive either the Netflix streaming service or Netflix DVD service. Memberships are assigned to territories based on the geographic location used at time of sign up as determined by the Company's internal systems, which utilize industry standard geo-location technology. The Company offers free-trial memberships to new and certain rejoining members. For inclusion in the definition of a membership in the above metrics, a method of payment is required to be provided even during the free-trial period. Total memberships therefore include those who are on a free-trial and have provided a method of payment. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations become effective at the end of the prepaid membership period, while involuntary cancellation of the service, as a result of a failed method of payment, becomes effective immediately.

Basis of Presentation and Summary of Significant Accounting Policies (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2015

segment

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Number of reportable segments

3

Other comprehensive loss reflected in cumulative translation adjustment

$ 21.8

Earnings Per Share - Computation Of Net Income Per Share (Details) (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Basic earnings per share:

Net income

$ 23,696

$ 53,115

Weighted-average common shares outstanding

60,518

59,817

Basic earnings per share (in dollars per share)

$ 0.39

$ 0.89

Diluted earnings per share:

Net income

$ 23,696

$ 53,115

Shares used in computation:

Weighted-average common shares outstanding

60,518

59,817

Employee stock options

1,455

1,731

Weighted-average number of shares

61,973

61,548

Diluted earnings per share (in dollars per share)

$ 0.38

$ 0.86

Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) (Employee stock options [Member])

In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Employee stock options [Member]

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Employee stock options

256

41

Short-term Investments - Available-For-Sale Securities Reported At Fair Value (Details) (USD $)

In Thousands, unless otherwise specified

Mar. 31, 2015

Dec. 31, 2014

Schedule of Available-for-sale Securities [Line Items]

Total, Amortized Cost

$ 2,961,454

$ 1,613,928

Total, Unrealized Gains

1,230

557

Total, Unrealized Losses

(54)

(295)

Total, Estimated Fair Value

2,962,630

1,614,190

Level 1 Securities [Member] |
Money market funds [Member]

Schedule of Available-for-sale Securities [Line Items]

Cash, Money market and Government and agency securities classified as cash equivalents, Amortized Cost

105,060

111,759

Cash, Money market and Government and agency securities classified as cash equivalents, Gross Unrealized Gains

0

Cash, Money market and Government and agency securities classified as cash equivalents, Gross Unrealized Losses

0

Cash, Money market and Government and agency securities classified as cash equivalents, Estimated Fair Value

105,060

111,759

Level 2 Securities [Member] |
Corporate debt securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale Securities, Amortized Cost

270,196

295,500

Available-for-sale Securities, Gross Unrealized Gains

726

432

Available-for-sale Securities, Gross Unrealized Losses

(49)

(199)

Available-for-sale Securities, Estimated Fair Value

270,873

295,733

Level 2 Securities [Member] |
Government securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale Securities, Amortized Cost

198,815

168,749

Available-for-sale Securities, Gross Unrealized Gains

479

120

Available-for-sale Securities, Gross Unrealized Losses

(5)

(95)

Available-for-sale Securities, Estimated Fair Value

199,289

168,774

Level 2 Securities [Member] |
Asset and mortgage-backed securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale Securities, Amortized Cost

112

Available-for-sale Securities, Gross Unrealized Gains

0

Available-for-sale Securities, Gross Unrealized Losses

0

Available-for-sale Securities, Estimated Fair Value

112

Level 2 Securities [Member] |
Certificates of deposits and commercial paper [Member]

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale Securities, Amortized Cost

6,100

Available-for-sale Securities, Gross Unrealized Gains

0

Available-for-sale Securities, Gross Unrealized Losses

0

Available-for-sale Securities, Estimated Fair Value

6,100

Level 2 Securities [Member] |
Certificates of deposit [Member]

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale Securities, Amortized Cost

3,600

Available-for-sale Securities, Gross Unrealized Gains

0

Available-for-sale Securities, Gross Unrealized Losses

0

Available-for-sale Securities, Estimated Fair Value

3,600

Level 2 Securities [Member] |
Agency securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale Securities, Amortized Cost

26,644

26,665

Available-for-sale Securities, Gross Unrealized Gains

25

5

Available-for-sale Securities, Gross Unrealized Losses

0

(1)

Available-for-sale Securities, Estimated Fair Value

26,669

Cash [Member]

Schedule of Available-for-sale Securities [Line Items]

Cash, Money market and Government and agency securities classified as cash equivalents, Amortized Cost

2,354,639

1,007,543

Cash, Money market and Government and agency securities classified as cash equivalents, Gross Unrealized Gains

0

Cash, Money market and Government and agency securities classified as cash equivalents, Gross Unrealized Losses

0

Cash, Money market and Government and agency securities classified as cash equivalents, Estimated Fair Value

$ 2,354,639

$ 1,007,543

Short-term Investments - Assets Classified on Consolidated Balance Sheets (Details) (USD $)

In Thousands, unless otherwise specified

Mar. 31, 2015

Dec. 31, 2014

Schedule of Available-for-sale Securities [Line Items]

Total, Estimated Fair Value

$ 2,962,630

$ 1,614,190

Fair Value, Measurements, Recurring [Member]

Schedule of Available-for-sale Securities [Line Items]

Total, Estimated Fair Value

2,962,630

1,614,190

Cash and Cash Equivalents [Member] |
Fair Value, Measurements, Recurring [Member]

Schedule of Available-for-sale Securities [Line Items]

Total, Estimated Fair Value

2,454,777

1,113,608

Short-term Investments [Member] |
Fair Value, Measurements, Recurring [Member]

Schedule of Available-for-sale Securities [Line Items]

Total, Estimated Fair Value

502,931

494,888

Other Non-current Assets [Member] |
Fair Value, Measurements, Recurring [Member]

Schedule of Available-for-sale Securities [Line Items]

Total, Estimated Fair Value

$ 4,922 ¹

$ 5,694 ¹

[1] Primarily restricted cash that is related to workers compensation deposits.

Short-term Investments - Estimated Fair Value Of Short-Term Investments By Contractual Maturity (Details) (USD $)

In Thousands, unless otherwise specified

Mar. 31, 2015

Short-Term Investments And Fair Value Measurement [Abstract]

Due within one year

$ 168,017

Due after one year and through five years

334,914

Total short-term investments

$ 502,931

Balance Sheet Components - Components of Content Library (Details) (USD $)

In Thousands, unless otherwise specified

Mar. 31, 2015

Dec. 31, 2014

Balance Sheet Components Disclosure [Abstract]

Total content library, gross

$ 9,239,372

$ 8,497,403

Accumulated amortization

(3,556,572)

(3,598,375)

Total content library, net

5,682,800

4,899,028

Current content library, net

2,370,447

2,125,702

Non-current content library, net

$ 3,312,353

$ 2,773,326

Balance Sheet Components - Property And Equipment And Accumulated Depreciation (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

12 Months Ended

Mar. 31, 2015

Dec. 31, 2014

Property, Plant and Equipment [Line Items]

Property and equipment, gross

$ 423,055

$ 414,691

Less: Accumulated depreciation

(277,239)

(264,816)

Property and equipment, net

145,816

149,875

Information technology assets [Member]

Property, Plant and Equipment [Line Items]

Estimated Useful Lives

3 years

Property and equipment, gross

189,059

189,274

Furniture and fixtures [Member]

Property, Plant and Equipment [Line Items]

Estimated Useful Lives

3 years

Property and equipment, gross

26,707

25,758

Building [Member]

Property, Plant and Equipment [Line Items]

Estimated Useful Lives

30 years

Property and equipment, gross

40,681

Leasehold improvements [Member]

Property, Plant and Equipment [Line Items]

Property and equipment, gross

59,830

57,339

DVD operations equipment [Member]

Property, Plant and Equipment [Line Items]

Estimated Useful Lives

5 years

Property and equipment, gross

89,137

89,144

Capital work-in-progress [Member]

Property, Plant and Equipment [Line Items]

Property and equipment, gross

$ 17,641

$ 12,495

Long-term Debt - Narrative (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Dec. 31, 2014

Mar. 31, 2015

Senior Notes [Member]

Debt Instrument [Line Items]

Aggregate outstanding principle

$ 2,400,000

$ 900,000

Redemption prices, percent of outstanding principal

101.00%

Long-term Debt - Summary of Long-term Debt (Details) (Senior Notes [Member], USD $)

1 Months Ended

Feb. 28, 2015

Mar. 31, 2015

5.375% Senior Notes [Member]

Dec. 31, 2014

5.375% Senior Notes [Member]

Mar. 31, 2015

5.750% Senior Notes [Member]

Dec. 31, 2014

5.750% Senior Notes [Member]

Mar. 31, 2015

5.50% Senior Notes [Member]

Feb. 28, 2015

5.50% Senior Notes [Member]

Dec. 31, 2014

5.50% Senior Notes [Member]

Mar. 31, 2015

5.875% Senior Notes [Member]

Feb. 28, 2015

5.875% Senior Notes [Member]

Dec. 31, 2014

5.875% Senior Notes [Member]

Debt Instrument [Line Items]

Principal Amount at Par

$ 500,000,000

$ 400,000,000

$ 700,000,000 ¹

$ 800,000,000 ¹

Fair Value

510,000,000 ²

520,000,000 ²

407,500,000 ²

416,000,000 ²

715,800,000 ¹ ²

0 ¹ ²

821,000,000 ¹ ²

0 ¹ ²

Interest rate

5.375%

5.75%

5.50% ¹

5.50%

5.875% ¹

5.875%

Net proceeds

1,482,400,000

Debt issuance costs, net

$ 17,600,000

$ 400,000

[1] The net proceeds to the Company for the 5.50% and 5.875% Senior Notes issued in the first quarter of 2015 were an aggregate $1,482.4 million. Debt issuance costs of $17.6 million (of which $0.4 million were unpaid as of March 31, 2015) were recorded in "Other non-current assets" on the Consolidated Balance Sheets and are amortized over the term of the notes as "Interest expense" on the Consolidated Statements of Operations.

[2] Based on quoted market prices in less active markets

Stockholders' Equity (Narrative) (Details) (USD $)

Share data in Millions, unless otherwise specified

0 Months Ended

3 Months Ended

Dec. 31, 2014

employee_group

Mar. 31, 2015

Mar. 31, 2014

Components of Stockholders' Equity [Line Items]

Total intrinsic value of options exercised

$ 80,800,000

$ 101,500,000

Cash received from option exercises

$ 10,916,000

$ 32,448,000

Number of employee groups

2

2011 Stock Plan [Member]

Components of Stockholders' Equity [Line Items]

Shares reserved for future issuance

2.7

Stockholders' Equity - Summary Of Activity Related To Stock Option Plans (Details) (USD $)

In Thousands, except Share data, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]

Shares Available for Grant, Beginning Balance

2,860,744

Options Outstanding, Number of Shares, Beginning Balance

3,263,631

Shares Available for Grant, Granted

(148,156)

Options Outstanding, Number of Shares, Granted

148,156

Options Outstanding, Number of Shares, Exercised

(204,880)

Shares Available for Grant, Ending Balance

2,712,588

Options Outstanding, Number of Shares, Ending Balance

3,206,907

Options Outstanding, Number of Shares, Vested and exercisable

3,206,907

Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]

Options Outstanding, Weighted-Average Exercise Price, Beginning Balance

$ 151.53

Options Outstanding, Weighted-Average Exercise Price, Granted

$ 417.43

Options Outstanding, Weighted-Average Exercise Price, Exercised

$ 50.12

Options Outstanding, Weighted-Average Exercise Price, Ending Balance

$ 170.29

Options Outstanding, Weighted-Average Exercise Price, Vested and exercisable

$ 170.29

Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]

Weighted-Average Remaining Contractual Term, Ending Balance

6 years 3 months 18 days

Weighted-Average Remaining Contractual Term, Vested and exercisable

6 years 3 months 18 days

Aggregate Intrinsic Value, Ending Balance

$ 801,626

Aggregate Intrinsic Value, Vested and exercisable

$ 801,626

Stockholders' Equity - Summary Of Assumptions Used To Value Stock Option Grants Using Lattice-Binomial Model (Details) (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Stockholders' Equity and Stock-based Compensation Disclosure [Abstract]

Dividend yield

0.00%

Expected volatility

36.00%

48.00%

Risk-free interest rate

2.03%

2.83%

Suboptimal exercise factor

248.00%

Suboptimal exercise factor, minimum

266.00%

Suboptimal exercise factor, maximum

407.00%

Weighted-average fair value (per share)

$ 185.22

$ 221.79

Total stock-based compensation expense (in thousands)

$ 27,441

$ 25,825

Total income tax benefit related to stock options (in thousands)

$ 10,392

$ 9,899

Accumulated Other Comprehensive Loss (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Accumulated Other Comprehensive Income (Loss) [Roll Forward]

Beginning balance

$ (4,446)

Other comprehensive (loss) income before reclassifications

(38,644)

Amounts reclassified from accumulated other comprehensive income

(64)

Net increase (decrease) in other comprehensive (loss) income

(38,708)

Ending balance

(43,154)

Foreign currency [Member]

Accumulated Other Comprehensive Income (Loss) [Roll Forward]

Beginning balance

(4,615)

Other comprehensive (loss) income before reclassifications

(39,490)

Amounts reclassified from accumulated other comprehensive income

0

Net increase (decrease) in other comprehensive (loss) income

(39,490)

Ending balance

(44,105)

Change in unrealized gains on available-for-sale securities [Member]

Accumulated Other Comprehensive Income (Loss) [Roll Forward]

Beginning balance

169

Other comprehensive (loss) income before reclassifications

846

Amounts reclassified from accumulated other comprehensive income

(64)

Net increase (decrease) in other comprehensive (loss) income

782

Ending balance

$ 951

Income Taxes (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Effective tax rates

38.00%

40.00%

Gross unrecognized tax benefits

$ 38.2

$ 34.8

Reduction in provision for income taxes due to impact of effective tax rate

31.8

Gross interest and penalties accrued

0.5

Deferred tax assets classified as other current assets

14.0

13.4

Deferred tax assets classified as other non-current assets

143.3

106.9

Income tax benefits attributable to the exercise of employee stock options recorded directly to Additional paid-in-capital

$ 28.8

$ 32.5

Commitments and Contingencies - Streaming Content - Narrative (Details) (USD $)

Mar. 31, 2015

Dec. 31, 2014

Contractual Obligation [Line Items]

Streaming obligations included in current content liabilities

$ 9,780,262,000

$ 9,451,112,000

Streaming obligations not reflected on Consolidated Balance Sheets

5,500,000,000

5,800,000,000

Current Content Liabilities [Member]

Contractual Obligation [Line Items]

Streaming obligations included in non-current content liabilities

2,400,000,000

2,100,000,000

Non-current Content Liabilities [Member]

Contractual Obligation [Line Items]

Streaming obligations included in non-current content liabilities

$ 1,900,000,000

$ 1,600,000,000

Commitments and Contingencies - Expected Timing of Payments for Commitments (Details) (USD $)

In Thousands, unless otherwise specified

Mar. 31, 2015

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Less than one year

$ 4,016,950

$ 3,747,648

Due after one year and through three years

4,634,792

4,495,103

Due after three years and through five years

1,071,291

1,164,308

Due after five years

57,229

44,053

Total streaming content obligations

$ 9,780,262

$ 9,451,112

Commitments and Contingencies - Legal Proceedings - Narrative (Details) (Pending Litigation [Member])

Apr. 2, 2012

United States District Court for the Northern District of California [Member]

lawsuits_filed

Feb. 29, 2012

United States District Court for the Northern District of California [Member]

lawsuits_filed

Feb. 24, 2012

United States District Court for the Northern District of California [Member]

lawsuits_filed

Feb. 13, 2012

United States District Court for the Northern District of California [Member]

lawsuits_filed

Jan. 27, 2012

United States District Court for the Northern District of California [Member]

lawsuits_filed

Jan. 13, 2012

United States District Court for the Northern District of California [Member]

lawsuits_filed

May 2, 2012

Superior Court of California, Santa Clara County [Member]

lawsuits_filed

Feb. 9, 2012

Superior Court of California, Santa Clara County [Member]

lawsuits_filed

Nov. 23, 2011

Superior Court of California, Santa Clara County [Member]

lawsuits_filed

Loss Contingencies [Line Items]

Shareholder suits

1

Segment Information - Narrative (Details)

3 Months Ended

Mar. 31, 2015

segment

Segment Reporting Information [Line Items]

Number of reportable segments

3

International Streaming [Member]

Segment Reporting Information [Line Items]

Number of reportable segments

1

Segment Information - Long-lived Assets by Geographical Areas (Details) (USD $)

In Thousands, unless otherwise specified

Mar. 31, 2015

Dec. 31, 2014

United States [Member]

Revenues from External Customers and Long-Lived Assets [Line Items]

Long-lived tangible assets

$ 135,080

$ 138,704

International [Member]

Revenues from External Customers and Long-Lived Assets [Line Items]

Long-lived tangible assets

$ 10,736

$ 11,171

Segment Information - Information On Reportable Segments And Reconciliation To Consolidated Net Income (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

subscription

Mar. 31, 2014

subscription

Dec. 31, 2014

Segment Reporting Information [Line Items]

Total memberships at end of period

0 ¹

Revenues

$ 1,573,129

$ 1,270,089

Cost of revenues

1,046,401

869,186

Marketing

194,677

137,098

Contribution profit (loss)

332,051

263,805

Other operating expenses

234,595

166,210

Operating income

97,456

97,595

Other income (expense)

(59,030)

(8,651)

Provision for income taxes

14,730

35,829

Net income

23,696

53,115

Amortization of content library

770,703

616,856

Total content library, net

5,682,800

4,899,028

Domestic Streaming [Member]

Segment Reporting Information [Line Items]

Total memberships at end of period

41,397,000 ¹

35,674,000 ¹

Revenues

984,532

798,617

Cost of revenues

582,529

517,094

Marketing

89,551

80,258

Contribution profit (loss)

312,452

201,265

Amortization of content library

431,989

386,315

Total content library, net

3,966,867

3,476,226

International Streaming [Member]

Segment Reporting Information [Line Items]

Total memberships at end of period

20,877,000 ¹

12,683,000 ¹

Revenues

415,397

267,118

Cost of revenues

375,278

245,267

Marketing

105,126

56,840

Contribution profit (loss)

(65,007)

(34,989)

Amortization of content library

317,529

214,420

Total content library, net

1,685,671

1,392,701

Domestic DVD [Member]

Segment Reporting Information [Line Items]

Total memberships at end of period

5,564,000 ¹

6,652,000 ¹

Revenues

173,200

204,354

Cost of revenues

88,594

106,825

Marketing

0

Contribution profit (loss)

84,606

97,529

Amortization of content library

21,185

16,121

Total content library, net

$ 30,262

$ 30,101

[1] A membership (also referred to as a subscription or member) is defined as the right to receive either the Netflix streaming service or Netflix DVD service. Memberships are assigned to territories based on the geographic location used at time of sign up as determined by the Company's internal systems, which utilize industry standard geo-location technology. The Company offers free-trial memberships to new and certain rejoining members. For inclusion in the definition of a membership in the above metrics, a method of payment is required to be provided even during the free-trial period. Total memberships therefore include those who are on a free-trial and have provided a method of payment. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations become effective at the end of the prepaid membership period, while involuntary cancellation of the service, as a result of a failed method of payment, becomes effective immediately.