Agreement - NetFlix Inc. and Columbia TriStar Home Entertainment Inc.


                                               As of May 1, 2000

NETFLIX, Inc.
970 University Avenue
Suite 100
Los Gatos, CA 95032-7606
Attn: Ted Sarandos, Vice President, Content Acquisition



        This letter agreement ("Agreement") sets forth the terms of the
                                ---------
agreement between Netflix ("Netflix") and Columbia TriStar Home Entertainment,
                            -------
Inc. ("CTHE") (formerly known as Columbia TriStar Home Video) in connection with
       ----
Netflix's ordering of certain "DVDs" (as such term is defined below) pursuant to
the terms hereof solely for the purposes of renting such DVDs to consumers
pursuant to Netflix's rental-by-mail business, and in connection therewith,
Netflix's and CTHE's participation in a "Revenue Sharing Program" (as defined
below) for the "Rental Pictures" (as defined below) covered by this Agreement.

A.      CONDITIONS PRECEDENT: All of CTHE's obligations under this Agreement are
        --------------------
subject to the satisfaction of the following conditions precedent ("Conditions
                                                                    ----------
Precedent"):(i) Netflix's willingness and operational capability to
---------
electronically report to CTHE (utilizing an electronic reporting system approved
by CTHE [CTHE hereby preapproves SuperComm]) point-of-sale information with
respect to Rental Pictures on an ongoing basis; and (ii) CTHE's receipt of this
Agreement executed by Netflix.

1.      TERM: The term of this Agreement shall be for a period of 5 years
        ----
        commencing on June 1, 2000 and ending on May 31, 2005 (the "Term")
                                                                    ----
        unless earlier terminated pursuant to the terms hereof. Each year of the
        Term shall be hereinafter referred to as a "Contract Year," with the
                                                    -------------
        first year being referred to as the "First Contract Year," etc.
                                             -------------------

2.      TERRITORY: The territory of the rights granted hereunder shall be and be
        ---------
        limited to the United States and its territories and possessions (the
        "Territory").
         ---------

3.      RENTAL PICTURES:
        ---------------

        a.      Definition: For purposes of this Agreement, "Rental Picture"
                ----------

        shall be defined as [*] motion picture for which CTHE owns or controls
        home entertainment distribution rights in the Territory (specifically
        including "Direct to Video Pictures," as defined below) which CTHE
        intends to release to consumers in the Territory on a Street Date during
        the Term for the first time on "DVD". For purposes of this Agreement,
        "Direct to Video Pictures" shall mean [*]
                    ------------------------

* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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        [*] motion picture that is initially made available for viewing in the
        Territory to consumers in videocassette and/or DVD format or premium
        cable premiere format and which otherwise fits within the description of
        a Rental Picture. A "DVD" shall mean a digital
                             ---
        versatile disc (or otherwise known as "digital video disc") format and
        shall include all sub-formats thereof.

4.      RENTAL TERMS: All DVDs ordered by Netflix hereunder shall be included in
        ------------
        Netflix's mail order rental program which makes DVDs available, on a
        rental or subscription basis, to consumers for home viewing purposes.
        Consumers can access information regarding Netflix's mail-order program
        and DVD inventory through Netflix's website at Netflix. In connection
        with the foregoing, Netflix represents, warrants and agrees as follows:

        a.      Shelf Space Guarantee: All Rental Pictures will be placed in the
                ---------------------
        "New Release" section of Netflix's website [*] for such Rental Picture.
        The New Release section shall be accessible by tab from Netflix's Home
        Page. The titles shall remain within the rotation of the line listing
        and box art for such [*] period.

        b.      Under the Netflix rental program the customers pay a monthly
        flat fee ("Subscription Fee") and may order an unlimited [*] number of
        DVD titles [*]. Such termination, if any, shall be CTHE's sole remedy
        in connection with any such expansion. Notwithstanding the foregoing,
        in the event of such a termination, Netflix shall remain obligated to
        CTHE pursuant to the terms and conditions hereof with respect to all
        DVDs of Rental Pictures ordered by Netflix prior to the date of such
        termination.

        c.     [*].

        d.      CTHE Page: Netflix will create and continuously maintain
                ---------
        (subject to CTHE's approval thereof) a "CTHE Page" listing all of CTHE's
        available titles which CTHE Page shall be accessible directly from
        Netflix's Home Page.

5.      ORDER REQUIREMENTS. Netflix shall order [*] Rental Picture
        ------------------
        from CTHE (i.e., on an output basis). In connection with each such
        order, the following shall apply:

        a.      Order Requirements: Netflix agrees to order and CTHE agrees to
                ------------------
        provide (provided Netflix is not in breach hereunder), a specified
        number of DVDs for such Rental Picture determined as follows:

* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       2



          i.  First and Second Contract Years. During the First and Second
              -------------------------------
          Contract Years, Netflix shall order such quantity of DVDs [*] basis.

          ii. Third, Fourth and Fifth Contract Years. During the Third, Fourth
              --------------------------------------
          and Fifth Contract Years, Netflix agrees to order such quantity (which
          quantity will be sufficient to [*] or DVDs [*].

6.   STREET DATE/ORDERING OF COPIES/DISTRIBUTION OF COPIES: With respect to each
     -----------------------------------------------------
     of the Rental Pictures, CTHE shall specify the date for the first DVD
     rental by Netflix of such Rental Picture to the general public for home
     entertainment purposes (the "Street Date"). Netflix shall place its orders
                                  -----------
     with CTHE for each Rental Picture, in accordance with subparagraph 5.a.
     above ("Initial Order"), not later than [*] prior to the Street Date
             -------------
     for such Rental Picture. Netflix acknowledges and agrees that if Netflix
     does not place its Initial Order within such [*] period, CTHE can not
     guarantee timely delivery of such DVDs.

7.   "REVENUE SHARING PROGRAM": [*] Rental Picture hereunder shall be
      -----------------------
     ordered by Netflix and shall be provided by CTHE pursuant to the revenue
     sharing terms set forth in this Agreement (the "Revenue Sharing Program").
                                                     -----------------------
     The consideration payable by Netflix for the right to participate in the
     Revenue Sharing Program with respect to any particular Rental Picture shall
     consist, in whole or in part, of a percentage of the "Rental Revenues" (as
     defined below) earned by Netflix from the rental of DVDs of such Rental
     Picture.

8.   "REVENUE SHARING PERIOD": The "Revenue Sharing Period" for each Rental
      ----------------------        ----------------------
     Picture shall be [*]. The Revenue Sharing Period for each applicable
     Rental Picture shall commence on the Street Date for the applicable Rental
     Picture. Netflix shall use commercially reasonable efforts to ensure that
     all DVDs of the Rental Pictures subject to inventory levels and
     month-to-month cycles) remain available for rental during the entire
     Revenue Sharing Period applicable to such Rental Picture.

9.   PROGRAM PRICE: In consideration for the rights granted hereunder, for each
     -------------
     DVD of a Rental Picture ordered by Netflix, Netflix shall pay CTHE a
     "Program Price" as follows:

     a.   [*]; plus
          ---

     b.   Revenue Percentage Payment: A share of Rental Revenue derived from the
          --------------------------
     rental of DVDs ("Revenue Percentage Payment") determined as follows: [*]


* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       3



     [*].

          The [*] and the Revenue Percentage Payment shall be hereinafter
     referred to as the "Program Price."

     c.   Definitions.
          -----------

          i.     A "Rental Transaction" shall mean each and every time DVD is
                    ------------------
          mailed or otherwise delivered to a customer. Netflix shall
          independently determine and charge its customers whatever Rental
          Transaction price it determines is in its own best business interests
          and without agreement with CTHE. CTHE does not suggest any particular
          Rental Transaction price.

          ii.    "Rental Revenues" shall mean the aggregate of all revenues
                  ---------------
          collected in connection with Rental Transactions occurring during the
          Revenue Sharing Period, including any [*]

          Netflix shall be solely obligated to pay all taxes, fees or
     governmental charges required to be paid by Netflix in connection with
     Netflix's activities undertaken pursuant to this Agreement. Netflix shall
     pay all such taxes within the applicable time periods.

10.  [*]: Netflix shall [*] ordered hereunder. At such time as Netflix orders
     ---
     DVDs of a particular Rental Picture pursuant to the terms hereof, CTHE
     shall [*] Notwithstanding the foregoing, Netflix shall discuss each title
     with CTHE [*].


* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       4




11.  ADVANCE: For each Rental Picture hereunder [*].


12.  DELIVERY/SHIPPING: CTHE will cause a third party duplicator/distributor to
     -----------------
     undertake direct distribution of all DVDs ordered by Netflix hereunder to
     [*] distribution centers (which shall be designated in writing by Netflix
     and which may only be changed upon 30 days prior written notice to CTHE).
     CTHE shall determine, in its sole discretion, to deliver DVDs either: [*].
     Netflix shall be solely responsible for making all DVDs "rental ready."
     CTHE will use reasonable, good faith efforts to deliver all DVDS ordered by
     Netflix hereunder to Netflix's distribution centers 7 days prior to the
     applicable Street Date(s) for such DVDs.

13.  PAYMENT: Netflix shall pay: [*].

14.  MISSING DVDS: In the event that DVDs of a Rental Picture are sold, stolen
     ------------
     or otherwise uncounted for during the Revenue Sharing Period for the
     applicable Rental Picture ("Missing DVD"), Netflix shall so inform CTHE and
     shall pay CTHE a sum equal to [*] ("Missing DVD Fees"). Missing DVD Fees
     shall be payable to CTHE [*].

15.  REPORTING OBLIGATIONS: Netflix shall report electronically to CTHE, on a
     ---------------------
     weekly basis, complete and accurate daily information regarding the rental
     of DVDs of the Rental Pictures acquired under this Agreement [*], in such
     format as may be specified by CTHE from time to time. At CTHE's request,
     Netflix shall provide CTHE with a copy of all tracking and other to the
     information obtained by Netflix, insofar as such information relates
     Rental Pictures. Notwithstanding the foregoing, the parties hereby agree to
     work together during the first 90 days of the Term to set up a mutually
     acceptable reporting format; provided, however, that in the event of any
     disagreement,

* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       5



     CTHE's decision shall prevail. As of August 31, 2000, the foregoing
     information shall be provided in a consolidated FTP file.

16.  MARKETING SUPPORT: In lieu of specific marketing support programs and as
     -----------------
     consideration for services to be performed by Netflix hereunder,[*].

17.  AUDIT:
     -----

     a.    Netflix grants CTHE the right, from time to time during the period
     commencing on the date hereof and concluding on the date which is 12 months
     after the expiration of the Term, upon not less than 7 business days prior
     notice, but no more than once in any calendar year, to examine and audit
     Netflix's records, invoices, books of account, computer or data base
     information which relate to the rental of DVDs of the Rental Pictures
     and/or the Revenue Sharing Program for the then immediately preceding 12
     month period (including, without limitation, all appropriate information
     provided to Netflix by customers, but which shall not include names,
     addresses and/or any individual identifying data of such customers). All
     such audits shall be conducted by an independent, qualified auditor of
     CTHE's choice. All such audits shall be at CTHE's sole cost and expense;
     provided however, that in the event such audit shall disclose an error or
     errors which in the aggregate equal or exceed 5% of the amounts owed to
     CTHE hereunder for the period being audited, Netflix shall promptly
     reimburse CTHE for all outside costs and expenses actually incurred in
     connection with such audit. CTHE may make copies of or make excerpts from
     only such part of Netflix's records, invoices, books of account, computer
     or data base information which relate to matters and time frames subject to
     examination as herein provided. Such examination shall be at such place
     where the relevant information is maintained and during reasonable business
     hours and in such manner so as not to interfere with Netflix's normal
     business activities. Such examination shall continue for such time as is
     reasonably necessary (but in any event not more the 30 consecutive days,
     provided that CTHE has been provided with the requisite access and
     information) for CTHE to complete the examination. Such right to examine
     hereunder is limited to the financial matters in connection with DVDs of
     Rental Pictures and/or the Revenue Sharing Program (collectively, "CTHE
     Product") and under no circumstances shall CTHE have the right to examine
     records relating to Netflix's business generally or with respect to other
     projects not related to CTHE Product, for purposes of comparison or
     otherwise; provided, however, that where any original income or expense
     document with third parties relates to CTHE Product and videocassettes or
     DVDs of a third party's titles, CTHE shall have the right to examine such
     document; provided, further that any information contained therein which
     does not relate to CTHE Product shall be redacted therefrom. Any amounts
     determined to be due and owing to CTHE following an audit


* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       6



        shall be paid to CTHE [*].


 b.     Netflix grants CTHE the right to conduct, or to engage an auditor to
        conduct, upon 48 hours notice, on location audits for purposes of
        "spot-checking" transaction information relating to the CTHE Product;
        provided; that CTHE shall not conduct such audits more than [*] at any
        one warehouse or geographical location and shall not interfere with
        the on-going business such that CTHE's activity would  require Netflix
        to shut down its operations at such location.

18.     NOTICE: Any notice or communications provided for hereunder must be in
        ------
        writing and delivered either personally, by messenger, overnight
        courier, registered mail, postage prepaid, or facsimile upon proper
        confirmation of receipt to the following addresses (or to such other
        address as specified by like notice):

                For Netflix:
                  Netflix, Inc.
                  970 University Avenue
                  Suite 100
                  Los Gatos, CA 95032-7606
                  Attention:  Ted Sarandos, Vice President, Content Acquisition


                For CTHE:
                  Columbia TriStar Home Entertainment, Inc.
                  10202 West Washington Boulevard, 8th Floor
                  Culver City, CA 90232
                  Attention:  Robin Russell, Senior Executive Vice President
                  Facsimile: (310) 244-1289


19.     REPRESENTATIONS AND WARRANTIES:
        ------------------------------


        a.     CTHE warrants and represents that it is a corporation duly
        organized and validly existing in good standing under the laws of the
        state of Delaware and has the full right, power, legal capacity and
        authority to enter into and carry out the terms of this Agreement.


        b.     Netflix warrants and represents that it is a corporation duly
        organized and validly existing in good standing under the laws of the
        state of Delaware and has the full right, power, legal capacity and
        authority to enter into and carry out the terms of this Agreement.

20.     INDEMNIFICATION:
        ---------------

* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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a.      Netflix agrees to indemnify and hold CTHE, its parent, subsidiary and
affiliated companies (including any future parent entity) and their respective
officers, agents, directors and employees, harmless from any and all claims,
damages, liabilities, costs and expenses (including reasonable attorneys fees)
arising out of the breach by Netflix of any warranty, representation or other
term or provision of this Agreement. CTHE shall promptly notify Netflix in
writing of any third party claim or litigation to which this indemnification
applies, and Netflix shall assume the defense of any such claim or litigation
(and CTHE shall have the right to engage separate counsel of its choice and
participate in the defense, negotiation and settlement of such action or
proceeding, but shall bear the fees and expenses of such separate counsel
retained by CTHE and CTHE shall cooperate with Netflix in the defense of such
claim at no cost or charge to Netflix, other than for performing such acts as
Netflix shall request). If, for any reason, Netflix shall fail to appoint
counsel on a timely basis or otherwise fails timely to confirm its assumption of
the defense of any applicable claim, CTHE may engage its own counsel and the
reasonable costs and expenses made in connection therewith shall be paid by
Netflix. Netflix shall have the right to approve or disapprove the settlement or
disposition of any such claim or litigation proposed by CTHE, which right shall
expire 20 business days following Netflix's receipt of written notice with
respect thereto. Netflix shall not have the right to enter into any settlement
or compromise unless, in connection therewith, it shall obtain from the
claimants a full release of all related claims against CTHE.

b.      CTHE shall indemnify and hold Netflix, its subsidiary and affiliated
companies and their respective officers, agents, directors and employees,
harmless from any and all claims, damages, liabilities, costs and expenses
(including reasonable attorneys fees) arising out of the breach by CTHE of any
warranty, representation or other term or provision of this Agreement Netflix
shall promptly notify CTHE in writing of any third party claim or litigation to
which this indemnification applies, and CTHE shall assume the defense of any
such claim or litigation (and Netflix shall have the right to engage separate
counsel of its choice and participate in the defense, negotiation and settlement
of such action or proceeding but shall bear the fees and expenses of such
separate counsel retained by Netflix and Netflix shall cooperate with CTHE in
the defense of such claim at no cost or charge to CTHE, other than for
performing such acts as CTHE shall request). If, for any reason, CTHE shall fail
to appoint counsel on a timely basis or otherwise fails timely to confirm its
assumption of the defense of any applicable claim, Netflix may engage its own
counsel and the reasonable costs and expenses made in connection therewith shall
be paid by CTHE. CTHE shall have the right to approve or disapprove the
settlement or disposition of any such claim or litigation proposed by Netflix,
which right shall expire 20 business days following CTHE's receipt of written
notice with respect thereto. CTHE shall not have the right to enter into any
settlement or compromise unless, in connection therewith, it shall obtain from
the claimants a full release of all related claims against Netflix.


c.      Notwithstanding the provisions of Paragraph 20. hereof, Netflix hereby
indemnifies, defends and holds harmless CTHE and its successors, permitted
assigns, employees, officers and directors from and against any and all claims
(and any liability, loss, damage, cost and expense, including, without
limitation, reasonable outside attorneys' fees arising out of such claims)
brought by shareholders or potential shareholders of Netflix arising out of any
reference to this Agreement or

                                       8



     the terms hereof; Sony Pictures Entertainment, CTHE or any affiliated
     entity in any of Netflix's disclosure documents.

21.  CONFIDENTIALITY: Other than as may be required (i) by applicable law,
     ---------------
     governmental order or regulation or securities laws or by order or decree
     of any court of competent jurisdiction, (ii) as part of its normal
     reporting requirements or review procedures to its parent company,
     auditors, attorneys or other advisors, (iii) in connection with a possible
     sale, merger or other consolidation transaction involving it or its parent
     company or (iv) in the case of CTHE, as may be disclosed to third party
     "profit" participants in connection with the Rental Pictures: neither party
     hereto (nor any agent acting on behalf of any party hereto) shall divulge
     or disclose to any third party any of the material terms and conditions of
     this Agreement (including, without limitation, the existence of this
     Agreement or any reference to Sony Pictures Entertainment, CTHE, or any
     affiliated entity), or any non-public information concerning the business
     or operations of a party (including information concerning Netflix obtained
     pursuant to Section 17 hereof) without the prior written consent of the
     other party hereto. In the event that disclosure is required pursuant to
     clause (i) above, the party so making disclosure shall so notify the other
     party (if possible, prior to making such disclosure and in any event as
     promptly as practical) and shall use its commercially reasonable efforts to
     seek confidential treatment of such information. The initial press release
     regarding the parties entering into this Agreement (if any) shall require
     the mutual written approval of both parties. Notwithstanding anything to
     the contrary contained herein, CTHE hereby acknowledges and agrees that
     Netflix may be required to share financial and other reporting information
     with respect to the Rental Pictures with the owner/operator of Netflix's
     computer program system and certain data information services in order to
     allow such owner/operator and/or such data information service to monitor,
     update and approve their program and/or service. In the event Netflix is
     required to share such information, Netflix shall so inform CTHE and shall,
     at CTHE's request, obtain a confidentially agreement, in a form approved by
     CTHE, signed on behalf of such owner/operator and/or data information
     service. Without limiting the generality of its obligations this Paragraph,
     Netflix agrees that it will not share with any third party any financial or
     other reporting information with respect to the Rental Pictures which is
     kept, maintained or compiled as part of the Revenue Sharing Program, except
     as set forth in this Paragraph 21.

22.  ASSIGNMENT/CHANGE OF CONTROL:
     ----------------------------

     a.  Assignment: CTHE shall be free to assign this Agreement and its rights
         ----------
     hereunder, and to delegate its duties at any time and from time to time, in
     whole or in part, to any person or entity; provided, however, that CTHE
     shall be released from its obligations under this Agreement only if such
     assignment is (i) to a person or entity into which CTHE merges or is
     consolidated or (ii) to a person or entity which acquires all or
     substantially all of CTHE's business and assets or (iii) to a person or
     entity which is controlled by, under common control with, or controls CTHE
     or (iv) with Netflix's prior written consent. Netflix shall not assign this
     Agreement nor its rights hereunder, nor delegate its duties under this
     Agreement in whole or in part, without CTHE's prior written consent (not to
     be unreasonably withheld); provided, however, that an assignment pursuant
     to or resulting from a sale, exchange or transfer of all or substantially
     all of Netflix's business and assets to any person or persons or any other
     form of business combination, including, without limitation, a

                                       9



     reorganization, merger, consolidation or a sale to the public, shall not
     require such consent so long as such assignment is not to a Competing Major
     Studio, such party is a financially responsible party capable of performing
     all of Netflix's obligations under this Agreement, such party orders DVD's
     hereunder solely for the purpose of a rental-by-mail business and which
     such party assumes in writing all of Netflix's rights and obligations
     hereunder. In the event that Netflix or CTHE assigns its rights or interest
     in or to this Agreement pursuant to the terms hereof, in whole or in part,
     the assigning party will nevertheless continue to remain fully and
     primarily responsible and liable to the other party for prompt, full,
     complete and faithful performance of all terms and conditions of this
     Agreement. For purposes of this Agreement, a "Competing Major Studio" shall
     mean [*] or any division of any of the foregoing, or any entity which
     controls, is controlled by or is under common control with any of the
     foregoing.

     b.   Change of Control: For purposes of subparagraph 20.a. hereof, a
          -----------------
     "change-of-control" of Netflix shall be deemed to be an assignment and
     shall be subject to the provisions of subparagraph 23.a. For purposes of
     this Agreement, a "change-of-control" of Netflix shall be deemed to have
     occurred, if, following the applicable transaction: a Competing Major
     Studio acquires [*] or more of the equity interests in Netflix.

23.  REMEDIES:  Subject to Paragraph 4.b. hereof, in addition to any and all
     --------
     other rights and remedies available to it at law or in equity, a non-
     defaulting party shall have the right to terminate this Agreement for any
     material breach by a defaulting party (a "Material Breach") and/or in the
                                               ---------------
     event of bankruptcy, insolvency, reorganization, assignment for the benefit
     of creditors or any such similar proceeding on the part of either party,
     or appointment of a receiver (or similar proceeding) for any of such
     party's property (each, an "Insolvency Event"). Notwithstanding the
                                ----------------
     foregoing, in the event of a Material Breach, the non-defaulting party
     shall notify the defaulting party of such Material Breach in writing and
     the defaulting party shall have 30 days to cure such Material Breach;
     provided, that in the event of Netflix's failure to timely report to CTHE
     pursuant to Paragraph 15 hereof or to pay (CTHE sums due under this
     Agreement, Netflix shall have 14 days to cure such Material Breach. The
     non-defaulting party shall have the right to terminate this Agreement for
     any such Material Breach that shall remain uncured for 30 (or, if
     applicable, 14) days following such notice and/or for any Insolvency Event;
     provided, that in the event that such Material Breach (other than
     nonpayment) is of a nature that reasonably requires more than 30 (or, if
     applicable, 14) days to cure, and the defaulting party is diligently in the
     process of such cure, the non-defaulting party will not terminate this
     Agreement unless the cure cannot be accomplished, or otherwise is not
     accomplished, in 60 days.

24.  GOVERNING LAW/ALTERNATIVE DISPUTE RESOLUTION:
     --------------------------------------------

     a.  Governing Law. THE INTERNAL SUBSTANTIVE LAWS (AS DISTINGUISHED FROM THE
         -------------
     CHOICE OF LAW RULES) OF THE STATE OF CALIFORNIA AND THE UNITED STATES OF
     AMERICA APPLICABLE TO CONTRACTS MADE AND PERFORMED ENTIRELY IN CALIFORNIA
     SHALL GOVERN (i) THE VALIDITY AND


* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       10



     INTERPRETATION OF THIS AGREEMENT, (ii) THE PERFORMANCE BY THE PARTIES OF
     THEIR RESPECTIVE OBLIGATIONS HEREUNDER, AND (iii) ALL OTHER CAUSES OF
     ACTION (WHETHER SOUNDING IN CONTRACT OR IN TORT) ARISING OUT OF OR RELATING
     TO THIS AGREEMENT OR THE TERMINATION OF THIS AGREEMENT.

     b.  Legal Proceedings. The parties hereto agree that any dispute or
         -----------------
     controversy relating to any of the matters referred to in clauses (i), (ii)
     and/or (iii) of subparagraph 25.a., above, shall be decided by a
     Rent-A-Judge, manually selected by the parties (or, if they cannot agree,
     by the Presiding Judge of the Los Angeles Superior Court) appointed in
     accordance with California Code of Civil Procedure Section 638, sitting
     without a jury, in Los Angeles County, California, and the parties hereby
     submit to the jurisdiction of such court. All such proceedings shall be
     closed to the public and confidential and all records thereto shall be
     permanently sealed.


25   MISCELLANEOUS:
     -------------

     a. Nothing contained herein shall be deemed to create a relationship of
     partnership, joint venture, agency, fiduciary or employment between the
     parties.

     b. This Agreement sets forth the entire understanding of the parties
     regarding the subject matter hereof and supersedes all prior oral or
     written agreements between them.

     c. No waiver of any default or breach of this Agreement by either party
     shall be deemed a continuing waiver or a waiver of any other breach or
     default, no matter how similar.

     d. This Agreement may not be changed, modified, amended or supplemented,
     except in a writing signed by both parties.

     e. Paragraph headings are inserted herein for convenience only and do not
     constitute a part of this Agreement.

     f. Netflix and CTHE shall execute, acknowledge and deliver any and all
     further documents that are necessary, expedient or proper to implement,
     administer and effectuate the purpose and intent of this Agreement.

                                       11




     g.   If any term or provision of this Agreement shall be found to be void
     or contrary to law, such term or provision shall, but only to the extent
     necessary to bring this Agreement within the requirements of law, be deemed
     to be severable from the other terms and provisions of this Agreement, and
     the remainder of this Agreement shall be given effect as if the parties had
     not included the severed term herein.

     Please confirm your agreement with the foregoing by signing below, and
return both copies to the undersigned, after which we will return a fully
executed copy to you.

                                Very truly yours,


                                COLUMBIA TRISTAR HOME ENTERTAINMENT, INC.

                                By: /s/ Robin Russell
                                    --------------------------------------
                                Title: ROBIN RUSSELL
                                       -----------------------------------
                                       Senior Executive Vice President
                                       Columbia TriStar Home Entertainment

AGREED TO AND ACCEPTED THIS 4 DAY OF March, 2002.
                            -        -----

NETFLIX

By: /s/ Ted Sarandos
    ------------------------------
Title: VP Content Acquisition
       ---------------------------

                                       12



                                   Schedule A

Revenue Per Rental Picture Calculation

Scenario I - [*]

* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.



                                   Schedule A

Revenue Per Rental Picture Calculation

Scenario II - [*]

* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.



                                   Schedule A

Revenue Per Rental Picture Calculation

Scenario III - [*]

* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.



                                   EXHIBIT A

                                DVD EVENT TITLES
                                ----------------

[*]

* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.