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Cost Drivers at Netflix, Inc

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Netflix Inc., Form 10-K, YE 12/31/2006
Retrieved from http://www.secinfo.com/d14D5a.u19Me.htm

This website provides Netflix's annual report for 2006. Specifically, focus on the section entitled, â??Managementâ??s Discussion and Analysis of Financial Condition and Results of Operations.â? Use the information in this report to answer the following questions:

1. What drives price and output volume for Netflix?

2. What factors drive cost, unit cost, and demand for inputs to Netflix's service outputs?

3. Construct (linear) models of relationships between cost drivers and costs. Under what conditions are such models inappropriate?

4. In general, who in an organization is responsible for different components of a cost variance?

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