First Online DVD Rental Store Opens Site Offers Unprecedented Title Selection, Availability And Convenience

SCOTTS VALLEY, Calif., (April 14, 1998) -- Netflix, Inc. today announced the opening of the world's first Internet store to offer DVD rentals. The Netflix store ( carries virtually every DVD, all of which are available for rental or purchase. DVD enthusiasts can now enjoy the convenience of online shopping at an Internet store with unparalleled DVD title selection and availability.

"Most DVD owners are hard-pressed to find a convenient place that rents a wide selection of DVDs," said Marc B. Randolph, Netflix president and CEO. "With a huge selection of DVD movies, all of which are available for a seven day rental or for sale, Netflix promises DVD fans the ultimate in DVD shopping."

DVD is the new Digital Video Disc format that features cinema-quality sound, high-resolution video and on-disc extras like the director's cut of movies, foreign language dubbing, subtitles and interactivity. Netflix, which currently carries more than 900 DVD titles, is committed to offering virtually every DVD movie available. Furthermore, Netflix has hundreds of copies of the most popular DVD titles, including New Releases, virtually guaranteeing that Netflix customers get the movie they want, when they want it.

Netflix offers same-day shipping with customers receiving their DVDs in two to three days, anywhere in the United States. All rentals can be kept for seven days. Once customers have enjoyed their DVD rentals, they simply put them in the pre-addressed, pre-paid mailer that Netflix provides and drop the mailer in the most convenient U.S. mailbox.

The Perfect Movie Every Time

The Netflix online store at is designed to offer the convenience of home shopping with the efficiencies of an online store. The Netflix store offers informative content, easy to use site navigation and search capabilities, low-cost delivery methods and competitive pricing. In addition, the Netflix store offers registered shoppers personalized merchandising and recommendations based on previous shopping sessions.

The Netflix store includes a large, informative selection of DVD-specific movie reviews, recommendations and articles to assist shoppers. In addition, the Netflix store offers a variety of search and browse features that make finding everything from the classics to the newest releases as easy as clicking a button. With "FlixFinder," shoppers can search by title, actor or director and instantly see a corresponding list of movies. Clicking on any name in the list takes shoppers directly to "FilmFacts," where a movie synopsis, ratings and descriptions of unique DVD features help them make a decision. Shoppers who are unsure of the title they want to see can use the "Browse the Aisles" feature to scan lists of movies grouped around a common element, such as theme or genre.

To select DVDs, shoppers simply click the Rent or Buy option for the movies of their choice. This adds each movie to their "Shopping Cart" and lets them continue shopping. Items can be added to or removed from the cart at any time.

Shoppers may also "reserve" DVD titles that have been announced, but not released, by clicking on the Rent or Buy option for the desired title and adding it to their Shopping Cart. Reserved movies are shipped to customers on their corresponding release date, or street date, which is determined by the movie studios.

DVDs Delivered To Your Door

NetFlix's seven day in-home rental offers customers unsurpassed value with the first two movies available for $4 each and any number of additional titles on the same order for just $3 each. Rental reservations are $5 per title. Delivery is available anywhere in the United States.

Customers pay a nominal round-trip shipping and handling fee of $2 for the first DVD and $1 for each additional movie in the same order, with a maximum shipping and handling charge of $5 per order. An overnight shipping option is available for an extra charge.

Shoppers can conduct business with Netflix with confidence since the "Secure Checkout" in the Netflix store uses sophisticated encryption techniques to ensure that customer information is protected 100 percent.

Like It? Keep It! Program

The unique "Like It? Keep It!" program provides an easy, economical and risk-free method for customers to build a home DVD library. After renting and enjoying a DVD movie, customers may opt to keep the movie simply by notifying Netflix by email. Netflix subtracts the previously billed rental fee from the purchase price and bills the customer's credit card for the difference.

Market Momentum For DVD

According to the Consumer Electronics Manufacturers Association, more than 400,000 DVD video players have been sold since the format was launched in the spring of 1997. That figure surpasses initial sales of both the compact disc, which sold only 35,000 players in one year, and the VCR, which took more than two years to sell 200,000 units.

“Over three million DVD titles have been sold to date, clearly demonstrating both Hollywood’s strong support and the fact that consumers are fast becoming avid collectors of DVD movies,â€Ôø ? noted Steve Nickerson, Vice President of Marketing at Toshiba. “I expect that Netflix’ offering a wide selection of DVD movies for rent on a national basis will fill a critical need for DVD enthusiasts and contribute to the market’s further growth.â€Ôø ?

"Consumers are entering a new digital era and will gradually be migrating towards higher quality entertainment delivered via DVD, DBS digital cable and eventually HDTV," said Derek Baine, senior analyst at Paul Kagan Associates. "We expect heavy users of entertainment product to adopt technologies such as DVD. The availability of a rental store on the Internet could speed the roll-out, especially in areas which don't have stores offering a wide variety of DVDs currently."

NetFlix's Management

NetFlix's management team is led by President and CEO Marc Randolph, who has a long history of success in both high technology and traditional mail order marketing. Randolph was one of the founders of PC mail order giant MicroWarehouse and more recently served as vice president of direct marketing at software developer Borland International.

About Netflix

With the world's largest selection of DVD movies, Netflix, Inc. rents and sells DVD movies to owners of DVD video players and DVD-ROM equipped PCs at its Internet store, The site offers virtually every DVD movie, for rent or for sale. By focusing on online rentals, Netflix is pioneering a new online retail model and e-commerce category. Founded in 1997, Netflix is headquartered in Scotts Valley, California.