Strong position in movie rentals Good cash flow generation capabilities Participation in the highly competitive home entertainment industry Dependence of business on decisions made by movie studios Potential for DVD rental to decline precipitously due to increasing demand for broadband delivered movies The ratings on Netflix Inc. reflect the risks of operating in a mature and declining video rental industry, the company's dependence on decisions made by movie studios, and the technology risks associated with delivery of video movies to the home. Netflix's good market position, though in a declining sector, good cash flow generating capabilities, ability to grow its subscriber base, and low leverage all help mitigate these risks. Netflix is the No. 1 player in the by-mail video
