Wilmot Reed Hastings Jr. founded one of the world’s largest online DVD rent-by-mail services in 1997 called Netflix. Two years later, Reed launched the subscription service, and within less then four years Netflix’s popularity grew to an amazing one million subscribers. Netflix is a company that offers a monthly flat-fee service of DVD movie rentals that are mailed to subscribers in pre-paid envelopes which include a return mailer and postage. Subscribers choose their movies by adding them to an ordered list called a rental queue. There are no late fees and a subscriber can keep a rental out for as long as they wish. The number of rentals a subscriber can have out at the same time depends on their subscription level, to rent a new movie, the subscriber must send one of the previous DVDs back. When the DVD is returned, Netflix mails out the next DVD on the subscriber’s rental queue.
Netflix was founded in Scotts Valley, California, in August of 1997 by Reed Hastings and Marc Randolph, both veteran "new technology" entrepreneurs, to rent and sell DVDs over the Internet. Reed came up with the idea for rental-by-mail when he was forced to pay $40 in fines after returning an overdue videotape of the film Apollo 13. As a business man and entrepreneur he thought why not pay $30 or $40 a month for as little or as many movie rentals as a person wanted. In addition, creating the concept of no late fees and unlimited due dates also proved to the companies advantage. Due to Netflix’s innovative ways, at the end of 2008, Netflix had an estimated astonishing 12 million subscribers.
Key to the firm's initial strategy was the fact that few stores carried DVDs, making renting them in person a hit-or-miss affair. The company was also able to take advantage of the small size and light weight of the discs, which could be shipped to users very cheaply.
The company opened for business on April 14, 1998, with 30 employees and 925 titles for rent, which comprised nearly the entire catalogue of DVDs in print. NetFlix initial rental plan offered a seven-day DVD rental for $4, plus $2 shipping, with the cost going down when additional discs were rented. Discs could be kept longer for an additional fee. New DVDs were also offered for sale at a discount of up to 30 percent. Consumers had the option to purchase a rented disc once they received it home by having the balance of the retail price charged to their credit card.
The firm has more than 1.1 million subscribers who pay a monthly fee of $8.99 for one DVD at a time rental, $13.99 for 2 DVD's out at a time rental and $16.99 a month for 3 DVD's out at a time rentals. The company offers over 100,000 titles and maintains an inventory of more than 5 million discs. For fast delivery, Netflix has opened more than 20 regional shipping centers around the United States. DVDs are received by customers within a business day after ordering them on the company's Web site.
A month after the company opened its virtual doors, it announced a promotional venture with Toshiba America to offer three free DVD rentals to purchasers of new Toshiba DVD players, and similar offers were soon made to buyers of Pioneer DVD players and select Hewlett-Packard and Apple computer models that included DVD drives. Later in the year, Sony was also signed up, with additional companies following later.
Reed is responsible for founding Pure Software, which he built into one of the world’s largest public software corporations earlier in his career. Reed has made it into Time Magazine’s “Time 100” list in 2005 as one of the most influential worldwide people. In addition to these accomplishments, back in March 26, 2007 he was elected to Microsoft Corporations board of directors. Therefore, as a powerful, intelligent businessman, Reed Hastings will be sure to continue the growth and prosperity of Netflix.
Ethical and Social Responsibility
Netlflix has adopted the Code of Ethics, for its directors, officers, and other employees. This Code has been reasonably designed to deter wrongdoing and to promote:
· Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
· Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission and in other public communications made by the Company;
· Compliance with applicable governmental laws, rules and regulations;
· The prompt internal reporting to an appropriate person or persons identified in this Code of violations of this Code; and
· Accountability for adherence to this Code.
Honest and Ethical Conduct
Netflix Parties are expected to act and perform their duties ethically and honestly and with the utmost integrity. Honest conduct is considered to be conduct that is free from fraud or deception. Ethical conduct is considered to be conduct conforming to accepted professional standards of conduct. Ethical conduct includes the ethical handling of actual or apparent conflicts of interest between personal and professional relationships as discussed in below.
Conflicts of Interest
A conflict of interest exists where the interests or benefits of one person or entity conflict or appear to conflict with the interests or benefits of the Company. While it is not possible to describe every situation in which a conflict of interest may arise, Netflix Parties must never use or attempt to use their position with the Company to obtain improper personal benefits. Any Netflix Party who is aware of a conflict of interest, or is concerned that a conflict might develop, is required to discuss the matter with a higher level of management or the General Counsel promptly. Senior Financial Officers may, in addition to speaking with the General Counsel, also discuss the matter with the Audit Committee.
Disclosure
Senior Financial Officers are responsible for ensuring that the disclosure in the Company's periodic reports is full, fair, accurate, timely and understandable. In doing so, Senior Financial Officers shall take such action as is reasonably appropriate to (i) establish and comply with disclosure controls and procedures and accounting and financial controls that are designed to ensure that material information relating to the Company is made known to them; (ii) confirm that the Company's periodic reports comply with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (iii) ensure that information contained in the Company's periodic reports fairly presents in all material respects the financial condition and results of operations of the Company.Senior Financial Officers will not knowingly (i) make, or permit or direct another to make, materially false or misleading entries in the Company's, or any of its subsidiary's, financial statements or records; (ii) fail to correct materially false and misleading financial statements or records; (iii) sign, or permit another to sign, a document containing materially false and misleading information; or (iv) falsely respond, or fail to respond, to specific inquiries of the Company's independent auditor or outside legal
Compliance
It is the Company's policy to comply with all applicable laws, rules and regulations. It is the personal responsibility of each Netflix Party to adhere to the standards and restrictions imposed by those laws, rules and regulations, and in particular, those relating to accounting and auditing matters.Any Netflix Party who is unsure whether a situation violates any applicable law, rule, regulation or Company policy should discuss the situation with the General Counsel.
Internal Reporting
Netflix Parties shall take all appropriate action to stop any known misconduct by fellow Netflix Parties that violate this Code. To this end, Netflix Parties shall report any known or suspected misconduct to the General Counsel or, in the case of misconduct by a Senior Financial Officer, also to the Chair of the Company's Audit Committee. In addition, Netflix Parties are encouraged to use the Company's confidential internal reporting system to report breaches of this Code. Information concerning the Company's confidential internal reporting system can be located on the Company's Intranet. The Company will not retaliate or allow retaliation for reports made in good faith.
Accountability
Any violation of this Code may result in disciplinary action, including termination, and if warranted, legal proceedings. This Code is a statement of certain fundamental principles, policies and procedures that govern the Netflix Parties in the conduct of the Company's business. It is not intended to and does not create any rights in any employee, customer, supplier, competitor, shareholder or any other person or entity. The General Counsel and/or the Audit Committee will investigate violations and appropriate action will be taken in the event of any violation of this Code.
Waivers and Amendments of the Code
The Company is committed to continuously reviewing and updating our policies and procedures. Therefore, this Code is subject to modification. Any amendment or waiver of any provision of this Code must be approved in writing by the Company's Board of Directors and promptly disclosed pursuant to applicable laws and regulations. Any waiver or modification of the Code by a Senior Financial Officer will be promptly disclosed to stockholders if and as required by law or the rules of the stock exchange or over the counter trading system on which Netflix's stock is traded or quoted.
Security and Risk Management
Netflix use different types of securities and risk management. The risk management they use is deactivated or terminates an account at will if Netflix needs to. They utilize secure sockets layering it is a standard protocol which encrypts any personal information that you enter into the site, for example your email and payment information. They can’t guarantee securities to its fullest just like everyone else but they urge to restrict access to your personal computer or any device that can access your account. This in turn will keep your information safe from anyone trying to access it
Netflix was founded in Scotts Valley, California, in August of 1997 by Reed Hastings and Marc Randolph, both veteran "new technology" entrepreneurs, to rent and sell DVDs over the Internet. Reed came up with the idea for rental-by-mail when he was forced to pay $40 in fines after returning an overdue videotape of the film Apollo 13. As a business man and entrepreneur he thought why not pay $30 or $40 a month for as little or as many movie rentals as a person wanted. In addition, creating the concept of no late fees and unlimited due dates also proved to the companies advantage. Due to Netflix’s innovative ways, at the end of 2008, Netflix had an estimated astonishing 12 million subscribers.
Key to the firm's initial strategy was the fact that few stores carried DVDs, making renting them in person a hit-or-miss affair. The company was also able to take advantage of the small size and light weight of the discs, which could be shipped to users very cheaply.
The company opened for business on April 14, 1998, with 30 employees and 925 titles for rent, which comprised nearly the entire catalogue of DVDs in print. NetFlix initial rental plan offered a seven-day DVD rental for $4, plus $2 shipping, with the cost going down when additional discs were rented. Discs could be kept longer for an additional fee. New DVDs were also offered for sale at a discount of up to 30 percent. Consumers had the option to purchase a rented disc once they received it home by having the balance of the retail price charged to their credit card.
The firm has more than 1.1 million subscribers who pay a monthly fee of $8.99 for one DVD at a time rental, $13.99 for 2 DVD's out at a time rental and $16.99 a month for 3 DVD's out at a time rentals. The company offers over 100,000 titles and maintains an inventory of more than 5 million discs. For fast delivery, Netflix has opened more than 20 regional shipping centers around the United States. DVDs are received by customers within a business day after ordering them on the company's Web site.
A month after the company opened its virtual doors, it announced a promotional venture with Toshiba America to offer three free DVD rentals to purchasers of new Toshiba DVD players, and similar offers were soon made to buyers of Pioneer DVD players and select Hewlett-Packard and Apple computer models that included DVD drives. Later in the year, Sony was also signed up, with additional companies following later.
Reed is responsible for founding Pure Software, which he built into one of the world’s largest public software corporations earlier in his career. Reed has made it into Time Magazine’s “Time 100” list in 2005 as one of the most influential worldwide people. In addition to these accomplishments, back in March 26, 2007 he was elected to Microsoft Corporations board of directors. Therefore, as a powerful, intelligent businessman, Reed Hastings will be sure to continue the growth and prosperity of Netflix.
Ethical and Social Responsibility
Netlflix has adopted the Code of Ethics, for its directors, officers, and other employees. This Code has been reasonably designed to deter wrongdoing and to promote:
· Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
· Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission and in other public communications made by the Company;
· Compliance with applicable governmental laws, rules and regulations;
· The prompt internal reporting to an appropriate person or persons identified in this Code of violations of this Code; and
· Accountability for adherence to this Code.
Honest and Ethical Conduct
Netflix Parties are expected to act and perform their duties ethically and honestly and with the utmost integrity. Honest conduct is considered to be conduct that is free from fraud or deception. Ethical conduct is considered to be conduct conforming to accepted professional standards of conduct. Ethical conduct includes the ethical handling of actual or apparent conflicts of interest between personal and professional relationships as discussed in below.
Conflicts of Interest
A conflict of interest exists where the interests or benefits of one person or entity conflict or appear to conflict with the interests or benefits of the Company. While it is not possible to describe every situation in which a conflict of interest may arise, Netflix Parties must never use or attempt to use their position with the Company to obtain improper personal benefits. Any Netflix Party who is aware of a conflict of interest, or is concerned that a conflict might develop, is required to discuss the matter with a higher level of management or the General Counsel promptly. Senior Financial Officers may, in addition to speaking with the General Counsel, also discuss the matter with the Audit Committee.
Disclosure
Senior Financial Officers are responsible for ensuring that the disclosure in the Company's periodic reports is full, fair, accurate, timely and understandable. In doing so, Senior Financial Officers shall take such action as is reasonably appropriate to (i) establish and comply with disclosure controls and procedures and accounting and financial controls that are designed to ensure that material information relating to the Company is made known to them; (ii) confirm that the Company's periodic reports comply with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (iii) ensure that information contained in the Company's periodic reports fairly presents in all material respects the financial condition and results of operations of the Company.Senior Financial Officers will not knowingly (i) make, or permit or direct another to make, materially false or misleading entries in the Company's, or any of its subsidiary's, financial statements or records; (ii) fail to correct materially false and misleading financial statements or records; (iii) sign, or permit another to sign, a document containing materially false and misleading information; or (iv) falsely respond, or fail to respond, to specific inquiries of the Company's independent auditor or outside legal
Compliance
It is the Company's policy to comply with all applicable laws, rules and regulations. It is the personal responsibility of each Netflix Party to adhere to the standards and restrictions imposed by those laws, rules and regulations, and in particular, those relating to accounting and auditing matters.Any Netflix Party who is unsure whether a situation violates any applicable law, rule, regulation or Company policy should discuss the situation with the General Counsel.
Internal Reporting
Netflix Parties shall take all appropriate action to stop any known misconduct by fellow Netflix Parties that violate this Code. To this end, Netflix Parties shall report any known or suspected misconduct to the General Counsel or, in the case of misconduct by a Senior Financial Officer, also to the Chair of the Company's Audit Committee. In addition, Netflix Parties are encouraged to use the Company's confidential internal reporting system to report breaches of this Code. Information concerning the Company's confidential internal reporting system can be located on the Company's Intranet. The Company will not retaliate or allow retaliation for reports made in good faith.
Accountability
Any violation of this Code may result in disciplinary action, including termination, and if warranted, legal proceedings. This Code is a statement of certain fundamental principles, policies and procedures that govern the Netflix Parties in the conduct of the Company's business. It is not intended to and does not create any rights in any employee, customer, supplier, competitor, shareholder or any other person or entity. The General Counsel and/or the Audit Committee will investigate violations and appropriate action will be taken in the event of any violation of this Code.
Waivers and Amendments of the Code
The Company is committed to continuously reviewing and updating our policies and procedures. Therefore, this Code is subject to modification. Any amendment or waiver of any provision of this Code must be approved in writing by the Company's Board of Directors and promptly disclosed pursuant to applicable laws and regulations. Any waiver or modification of the Code by a Senior Financial Officer will be promptly disclosed to stockholders if and as required by law or the rules of the stock exchange or over the counter trading system on which Netflix's stock is traded or quoted.
Security and Risk Management
Netflix use different types of securities and risk management. The risk management they use is deactivated or terminates an account at will if Netflix needs to. They utilize secure sockets layering it is a standard protocol which encrypts any personal information that you enter into the site, for example your email and payment information. They can’t guarantee securities to its fullest just like everyone else but they urge to restrict access to your personal computer or any device that can access your account. This in turn will keep your information safe from anyone trying to access it
