Netflix is a streaming service that provide movies and tv shows to
their providers.
Document (sec.gov)
Netflix risk factors are:
We face risks, such as unforeseen costs and potential liability in
connection with content we acquire, produce, license and/or
distribute through our service.
As a producer and distributor of content, we face potential liability
for negligence, copyright and trademark infringement, or other
claims based on the nature and content of materials that we
acquire, produce, license and/or distribute. We also may face
potential liability for content used in promoting our service,
including marketing materials. We are devoting more resources
toward the development, production, marketing and distribution of
original programming, including TV series and movies. We believe
that original programming can help differentiate our service from
other offerings, enhance our brand and otherwise attract and retain
members.
If studios, content providers or other rights holders refuse to license
streaming content or other rights upon terms acceptable to us, our
business could be adversely affected.
Our ability to provide our members with content they can watch
depends on studios, content providers and other rights holders
licensing rights to distribute such content and certain related
elements thereof, such as the public performance of music contained
within the content we distribute. The license periods and the terms
and conditions of such licenses vary. If the studios, content providers
and other rights holders are not or are no longer willing or able to
license us content upon terms acceptable to us, our ability to stream
content to our members will be adversely affected and/or our costs
could increase.
We are subject to taxation related risks in multiple jurisdictions.
We are a U.S.-based multinational company subject to tax in multiple
U.S. and foreign tax jurisdictions. Significant judgment is required in
determining our global provision for income taxes, deferred tax assets
or liabilities and in evaluating our tax positions on a worldwide basis.
While we believe our tax positions are consistent with the tax laws in
the jurisdictions in which we conduct our business, it is possible that
these positions may be overturned by jurisdictional tax authorities,
which may have a significant impact on our global provision for
income taxes.
What an auditor my design based on these risks are:
Account Receivables
Review how much money is made by memberships and how many
people use one account per household. To keep up with other
streaming services Netflix can try to work with other companies that
are on their own to have a bundle deal of streaming services under
one service. Focus groups to see what the customers would like to
see on their streaming services.
