This excerpt taken from the NFLX 10-K filed Mar 16, 2006.
Strategic Marketing Alliance Intangible Assets
During 2001, in connection with a strategic marketing alliance agreement, the Company issued 416,440 shares of Series F Preferred Stock. These shares automatically converted into 277,626 shares of common stock upon the closing of the Companys initial public offering. Under the agreement, the strategic partner has committed to provide, on a best-efforts basis, a stipulated number of impressions to a co-branded Web site and the Companys Web site over a period of 24 months. In addition, the Company is allowed to use the partners trademark and logo in marketing the Companys subscription services. The Company recognized the fair value of these instruments as intangible assets with a corresponding credit to additional paid-in capital. The intangible assets have been fully amortized on a straight-line basis to marketing expense over the two-year term of the agreement.