#1#2#3Contents. ● Overview ASC 920: Entertainment - Broadcasters and ASC 926: Entertainment - Films Financial Statements Impact on Cash Flow Frequently Asked Questions 3#4Overview. NETFLIX 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 Ozark 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 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#6#7#8#9#10#11#12#13#14#15#16#17#18#19#20#21#22#23#24#25#26#27#28