Exhibit 99.1

January 25th, 2012

Dear Fellow Shareholders,

The global opportunity for streaming TV shows and movies becomes more compelling every year with the rise of smart TVs and faster broadband. With our streaming growth, Netflix is leading the development of Internet TV. Members enjoyed over 2 billion hours of Netflix streaming video in Q4, which is approximately 30 hours per member per month on average. Every quarter we are improving our content selection, we are improving our user experience, we are learning more about social, and we are increasing our brand awareness in the 47 countries where we offer our Internet TV network.

 

(in millions, except per share data)    Q1 ‘10     Q2 ‘10     Q3 ‘10     Q4 ‘10     Q1 ‘11     Q2 ‘11     Q3 ‘11     Q4 ‘11  

Domestic Streaming:

                

Net Subscription Additions

     —          —          —          —          —          —          —          0.22   

Total Subscriptions

     —          —          —          —          —          —          21.45        21.67   

Revenue

     —          —          —          —          —          —          —        $ 476   

Contribution Profit

     —          —          —          —          —          —          —        $ 52   

Contribution Margin

     —          —          —          —          —          —          —          10.9

International Streaming:

                

Net Subscription Additions

     —          —          0.13        0.38        0.29        0.16        0.51        0.38   

Total Subscriptions

     —          —          0.13        0.51        0.80        0.97        1.48        1.86   

Revenue

     —          —        $ —        $ 4      $ 12      $ 19      $ 23      $ 29   

Contribution Profit (Loss)

     —          —        $ (3   $ (9   $ (11   $ (9   $ (23   $ (60

Domestic DVD:

                

Net Subscription Additions

     —          —          —          —          —          —          —          (2.76

Total Subscriptions

     —          —          —          —          —          —          13.93        11.17   

Revenue

     —          —          —          —          —          —          —        $ 370   

Contribution Profit

     —          —          —          —          —          —          —        $ 194   

Contribution Margin

     —          —          —          —          —          —          —          52.4

Total Domestic (Streaming + DVD, for historical comparison):

  

Net Unique U.S. Subscriber Additions

     1.70        1.03        1.80        2.70        3.30        1.80        (0.81     0.61   

Total Unique U.S. Subscribers

     13.97        15.00        16.80        19.50        22.80        24.59        23.79        24.40   

Y/Y Change

     35     42     51     59     63     64     42     25

Revenue

   $ 494      $ 520      $ 553      $ 592      $ 706      $ 770      $ 799      $ 847   

Y/Y Change

     25     27     31     33     43     48     44     43

Contribution Profit

   $ 111      $ 130      $ 130      $ 152      $ 187      $ 213      $ 219      $ 246   

Y/Y Change

     53     40     46     55     68     64     68     62

Global:

                

Revenue

   $ 494      $ 520      $ 553      $ 596      $ 719      $ 789      $ 822      $ 876   

Y/Y Change

     25     27     31     34     46     52     49     47

Net Income

   $ 32      $ 44      $ 38      $ 47      $ 60      $ 68      $ 62      $ 41   

Y/Y Change

     45     38     27     52     88     55     63     -13

EPS

   $ 0.59      $ 0.80      $ 0.70      $ 0.87      $ 1.11      $ 1.26      $ 1.16      $ 0.73   

Y/Y Change

     59     48     35     55     88     58     66     -16

Free Cash Flow

   $ 38      $ 34      $ 8      $ 51      $ 79      $ 60      $ 14      $ 34   

Buyback

   $ 108      $ 45      $ 57      $ —        $ 109      $ 51      $ 40      $ —     

Shares (FD)

     54.8        54.3        53.9        54.2        54.2        53.9        53.9        55.4   

 

LOGO

   1


The following information was filed by Netflix Inc (NFLX) on Wednesday, January 25, 2012 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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