Good position in the highly competitive and rapidly evolving domestic media entertainment industry; Solid credit measures; and Positive cash flow generation. Recent strategic missteps; and Fierce competition leading to escalating content costs; and Potential for streaming and DVD rental businesses to decline due to new technologies. The 'BB' corporate credit rating and negative outlook on Los Gatos, Calif.-based home entertainment provider Netflix Inc. reflect our expectation that increased investments for the company's international expansion, likely subscriber declines in the third and fourth quarter of 2011, and escalating content commitments will lower profitability over the near term. While acknowledging Netflix' growing programming commitments, we view the company as likely to maintain moderate debt usage while expanding into international markets and investing
