#1#2Disclosure This presentation is intended to provide additional information to investors on certain accounting matters. This information should be considered in addition to, not as a substitute for or superior to the disclosure contained in our filings with the Securities and Exchange Commission. You should read this discussion in conjunction with the condensed consolidated financial statements and the notes thereto included in our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K. 2 NETFLIX#3#4#5Streaming content accounting standards. We use two accounting standards for our streaming content costs. Since we launched streaming in 2007, we have used the guidance of ASC 920: Entertainment - Broadcasting because we started the streaming service with content that we license (rather than own). We license both Netflix originals (such as House of Cards and Orange is the New Black) as well as 2nd run titles, such as Shameless and How to Get Away with Murder Beginning in 2016, we also now apply the guidance of ASC 926: Entertainment - Films for the original content that we self-produce and where we own the intellectual property. We believe the benefits of self-producing content include lower costs (no studio middle-man), ownership of the intellectual property, which allows us to potentially monetize in different ways (eg, licensing & merchandising) and greater rights flexibility (global rights, exclusivity) In Q1'19, we early-adopted the update (ASU 2019-2) to accounting standards for ASC 920 and 926. There was no material impact as our accounting policies are already consistent with the new rules. 5 NETFLIX#6Examples. Type of content Examples Netflix Originals (Branded) Owned Stranger Things, Mindhunter, Dave Chappelle, Ingobernable, Bird Box, Dark, Sacred Games, Big Mouth, Godless, Nailed It!, The Irishman, The Witcher 6 Licensed House of Cards (MRC), Orange is the New Black (Lionsgate), Narcos (Gaumont), The Crown (Sony), 13 Reasons Why (Paramount) 2nd Run movies & TV shows Licensed Shameless (Showtime), How to Get Away with Murder (ABC), The Office (Universal), The Godfather (Paramount) NETFLIX#7#8#9#10#11#12#13#14#15#16#17#18#19#20#21#22#23#24#25#26#27#28