Class Action Lawsuit Commenced Against Netflix, Inc. by Bernstein Liebhard & Lifshitz, LLP

Market Wire, September, 2004

A securities class action lawsuit was commenced in the United States District Court for the Northern District of California on behalf of all persons who purchased or acquired securities of Netflix, Inc. (NASDAQ: NFLX) ("Netflix" or the "Company") between October 1, 2003 through July 15, 2004, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). A copy of the Complaint is available from the Court or from Bernstein Liebhard & Lifshitz, LLP. Please visit our website at http://www.bernlieb.com or contact us at (800) 217-1522 or by e-mail at NFLX@bernlieb.com.

The Complaint charges Netflix, Reed Hastings and W. Barry McCarthy Jr. with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (i) that the Company knew or recklessly disregarded the fact that the Company's growth was adversely affected by substantial customer attrition; (ii) that in order to camouflage the high rate of customer attrition, defendants manipulated the Company's churn rate; and (iii) that as a consequence of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company's growth and progress.

On July 15, 2004, Netflix reported results for the second quarter ended June 30, 2004. The press release disclosed the true number of customer cancellations suffered by the Company. Following the announcement, shares of Netflix fell $8.98 per share or 28.06 percent, on July 16, 2004, to close at $23.02 per share.

Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired Netflix securities during the Class Period. If you purchased or otherwise acquired Netflix securities during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than September 20, 2004.

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard & Lifshitz, LLP, or other counsel of your choice, to serve as your counsel in this action.

Bernstein Liebhard & Lifshitz, LLP has been retained as one of the law firms to represent the class. The attorneys at Bernstein Liebhard & Lifshitz, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. For more information about Bernstein Liebhard & Lifshitz, LLP, please visit our website at http://www.bernlieb.com.

If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact our Shareholder Relations Department, at Bernstein Liebhard & Lifshitz, LLP, 10 East 40th Street, New York, New York 10016, (800) 217-1522 or (212) 779-1414 or by e-mail at NFLX@bernlieb.com.

Shareholder Relations Department Bernstein Liebhard & Lifshitz, LLP (800) 217-1522 (212) 779-1414 NFLX@bernlieb.com