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 rental market; the company has 11 million subscribers. Blockbuster is Netflix's closest competitor and has two million online subscribers. In terms of the overall rental market, Netflix is the third largest player and has a 17% share, compared with Blockbuster's 27% share
