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These excerpts taken from the NFLX 10-K filed Feb 25, 2009. Challenges Faced by Consumers in Selecting In-Home Entertainment Video The continued proliferation of new releases of entertainment video, coupled with the availability of a large and growing back catalog of titles on DVD create two primary challenges for consumers in selecting titles. First, despite the large number of available titles on DVD, existing subscription channels and traditional DVD rental outlets stock a limited selection of titles, frustrating consumer demand for more choice. Subscription channels, pay-per-view and VOD services continue to offer a relatively narrow selection of titles. Likewise, traditional DVD rental outlets primarily offer new releases and devote limited space to display and stock back catalog titles. We believe our selection of over 100,000 titles on DVD offers an attractive alternative to these traditional channels. Second, even when consumers have access to the vast number of titles available, they generally have limited means to effectively sort through the titles. We believe our recommendation service, our merchandising practices and our other Web site features provide our subscribers the tools to select titles that appeal to their individual preferences.
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Table of ContentsChallenges Faced by Consumers in Selecting In-Home Entertainment Video The continued proliferation of new releases of entertainment video, coupled with the availability of a large and growing back catalog of titles on DVD create two primary challenges for consumers in selecting titles. First, despite the large number of available titles on DVD, existing subscription channels and traditional DVD rental outlets stock a limited selection of titles, frustrating consumer demand for more choice. Subscription channels, pay-per-view and VOD services continue to offer a relatively narrow selection of titles. Likewise, traditional DVD rental outlets primarily offer new releases and devote limited space to display and stock back catalog titles. We believe our selection of over 100,000 titles on DVD offers an attractive alternative to these traditional channels. Second, even when consumers have access to the vast number of titles available, they generally have limited means to effectively sort through the titles. We believe our recommendation service, our merchandising practices and our other Web site features provide our subscribers the tools to select titles that appeal to their individual preferences.
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