Overview of Content Accounting Investor Relations
Streaming 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.
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