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Author: LeKitKat Big gold star, 5000 posts Top Favorite Fools Feste Award Nominee! Feste Award Winner! Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3916  
Subject: Re: Netflix accounting tangle Date: 11/6/2011 12:02 AM
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hi zf

Still looking for the $239 million that is expensed on the profit loss bringing total P&L expense of acquisitions to $762. Not finding it.

So far all I can find is for 9 months

costs of subscription $1277 includes content and mailing and cost of distribution of streaming content

amortization was $492 for DVDs+ streaming content

The remainder is $785 million in cost of subscription.

Part of the $785 is mailing DVDs and paying Amazon for access to streaming infrastructure. The rest is the cost of content that does not get amortized. If I knew the amount of each, I would know how much unamortized cost of content was. NFLX doesn't say

NFLX does say that costs of subscription increased $459.7 million.
We know that the entire $459.7 million went to buy content---NFLX says so.

That increase presumably has to include the cost of increased amortized content as well as the elusive amount we are looking for--streaming content paid in the P&L that was not amortized.

There was a $287 million increase in amortized content cost. I included DVDs just to keep it from getting more confusing

That leaves $173 million in increased streaming content cost for 9 months that was not amortized. This is not the total cost--just the increase

Suppose you were tempted just to take the amortized amount of $492 and add the increase $173 to see if that gets you to $762--it does not --it is $665. So there is some content cost in there I can't find. Don't know where to look or even if this where I should be looking. The costs according to HRs work for content in the P&L are $762 and $239 in excess of the amortized amount.
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