In the fall of 2011, Netflix has worked right the ship after stumbling upon the public through higher prices and strategic change, and then retired. The company was changing its business model to focus on video streaming service instead of the DVD in the mail that had brought the company success and praise. One major wrinkle in this business model change occurred in accounting for streaming. The case describes the rule, FAS 63, which used to account for streaming Netflix content and the implications for the future of the company that could be attributed to this accounting change.
by
François Brochet
Suraj Srinivasan,
Michael Norris
Source: Harvard Business School
18 pages.
Release: Aug 29, 2012. Prod #: 113018-PDF-ENG
Netflix: Valuation of a Business Case Solution New Model
Related Case Solutions:
Necessary Illusions and Dangerous Delusions
Michelle Rhee and the Washington D.C. Public Schools
Netcetera (A): Hiring An External CEO?
Cost of Capital Problems
Ultrabrand’s Journey to a Smarter Web Analytics Product Offering
Navigating the Realm of the High-Potential Employee
Case Study Solutions for MBA Programs
Netflix Case Study
Nestlé: Leveraging The Hard Discounter Channel
Note on Long-Run Models of Economic Growth