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Netflix's Annual Reports (10-Ks) used to be a work of art. What happened?

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Re: Netflix's Annual Reports (10-Ks) used to be a work of art. What happened?

#21

Post by breput »

WheelsAtLarge wrote: post #18

I worked for a company that would spend hundreds of thousands of dollars on their annual report. Every year it was a big deal. There were meetings, interviews, photo shoots and a lot of late nights to make sure it was just perfect and on time. It was beautiful every year. Then one year a new Chief of operations was hired. She reviewed costs and saw that the creative department was too expensive. She closed it and out…

Like everything, the fancy designed reports (annual or otherwise) come and go out of fashion.

Yesterday it was a requirement. Today it is too expensive and the COO got credit for cutting expenses. Tomorrow the CFO is jealous of Company X's report and it's back.

Re: Netflix's Annual Reports (10-Ks) used to be a work of art. What happened?

#22

Post by carls »

breput wrote: post #19
carls wrote: post #16

Earlier quoted context omitted.

It seems like the blog is referencing the documents posted directly on Netflix's website[1], the early versions of which do open up with well-designed cover pages. In contrast, the link you shared is perhaps the direct filings that the SEC receives from the company, which may remove these designed elements prior to filing. ----- [1] https://ir.netflix.net/financials/annual-reports-and-proxies...

That's what I figured. So the blog post is completely off-course - this person is complaining that the Investor Relations site no long has tarted up versions of the annual filings. "One fine day, as I was following the internet rathole, I landed myself on the Netflix investor page for some reason. One thing to understand about these 10-K forms is that these are …. pretty basic." Like the vast majority of companies th…

Although the author may be wrong about whether the 10-Ks he saw were the same ones being submitted to the government, I think his curiosity is still worth indulging.

Why did Netflix slowly stop designing their 10-K reports that lived on their own investor relation page?

My own guess is that there was some downward pressure to just produce the basic report, since that's all the government would see and investors wouldn't really value the design.

Re: Netflix's Annual Reports (10-Ks) used to be a work of art. What happened?

#23

Post by Moxdi »

WheelsAtLarge wrote: post #18

I worked for a company that would spend hundreds of thousands of dollars on their annual report. Every year it was a big deal. There were meetings, interviews, photo shoots and a lot of late nights to make sure it was just perfect and on time. It was beautiful every year. Then one year a new Chief of operations was hired. She reviewed costs and saw that the creative department was too expensive. She closed it and out…

Sound like it was fun, and now it's boring, was it worth it?

Re: Netflix's Annual Reports (10-Ks) used to be a work of art. What happened?

#25

Post by heleninboodler »

carls wrote: post #20
ntdef wrote: post #7

What happened was Barry McCarthy, who was CFO at Netflix till 2010, left Netflix. Barry was an exceedingly creative and forward thinking CFO. He was the CFO responsible for taking Spotify public via direct listing in 2018, which was an incredibly bold move at the time. Definitely creative as far as CFOs go.

I'm not sure this is a sufficient explanation. McCarthy left in 2010. But it looks like the decline in the "designy"-ness began in 2006.

Adobe used to do these designy annual reports as well [1], and it looks like they stopped in 2003. I wonder if something in that era encouraged them to knock it off.

Edit: for Adobe, it may have coincided with significantly cutting back their Marketing/Communications department, which had a huge staff of really great artists in the 90's. I believe this became viewed as an extravagance to have a stable of really talented and creative artists and designers on staff when you can hire this stuff out and get "reasonable" results.

[1] example: https://www.yumpu.com/en/document/view/33241791/adobe-annual...

Re: Netflix's Annual Reports (10-Ks) used to be a work of art. What happened?

#26

Post by hbcondo714 »

Annual Report:

A corporation's annual report is usually a colored, professionally presented, and marketable document intended for an audience of shareholders.

10-K:

The 10-K report is submitted to the SEC in a generic format, with no pictures or charts. The SEC has very strict guidelines on what information must be included and how it must be organized.

Source: https://www.investopedia.com/ask/answers/102714/what-are-dif...

Edit: I'm glad to see this is the #1 post on HN (at the time of this writing) even though the author, like many individual and some institutional investors, innocently do not know the difference between a company's PR-like annual report and an SEC-audited 10-K form. Hopefully the upvotes will draw attention to this common misconception which is also discussed by the SEC:

https://www.investor.gov/introduction-investing/investing-ba...

Disclosure / Shameless Plug:

I run https://Last10K.com which is an SEC.gov alternative for investors to find and read 10Ks more efficiently.

Re: Netflix's Annual Reports (10-Ks) used to be a work of art. What happened?

#28

Post by devmunchies »

paxys wrote: post #17

I think the move makes sense. There are lots of avenues for creative advertising available to a company. Standard financial disclosures shouldn't be one of them, especially since more and more of them are being machine-read nowadays.

> There are lots of avenues for creative advertising available to a company. Standard financial disclosures shouldn't be one of them

if a goal of marketing is to stand out then its the perfect place. very little is off limits.

Re: Netflix's Annual Reports (10-Ks) used to be a work of art. What happened?

#29

Post by ekianjo »

WheelsAtLarge wrote: post #18

I worked for a company that would spend hundreds of thousands of dollars on their annual report. Every year it was a big deal. There were meetings, interviews, photo shoots and a lot of late nights to make sure it was just perfect and on time. It was beautiful every year. Then one year a new Chief of operations was hired. She reviewed costs and saw that the creative department was too expensive. She closed it and out…

> It never came back.

Just like any kind of fun left in the company?

Re: Netflix's Annual Reports (10-Ks) used to be a work of art. What happened?

#30

Post by breput »

carls wrote: post #22
breput wrote: post #19

Earlier quoted context omitted.

That's what I figured. So the blog post is completely off-course - this person is complaining that the Investor Relations site no long has tarted up versions of the annual filings. "One fine day, as I was following the internet rathole, I landed myself on the Netflix investor page for some reason. One thing to understand about these 10-K forms is that these are …. pretty basic." Like the vast majority of companies th…

Although the author may be wrong about whether the 10-Ks he saw were the same ones being submitted to the government, I think his curiosity is still worth indulging. Why did Netflix slowly stop designing their 10-K reports that lived on their own investor relation page? My own guess is that there was some downward pressure to just produce the basic report, since that's all the government would see and investors would…

If I had to guess (other than the general comings and goings of style), it would have been related to the increasing (mandated) usage of XBRL. The visual presentation was no longer as interesting as soon as you could extract the data in a machine readable format.

Except joke is on them because XBRL and the GAAP taxonomies allows "extension concepts" or tags(1) which basically means "we can make up our own reporting identifiers and you can't do anything about it" and makes categorizing accounting data very difficult across companies.

1: https://www.sec.gov/structureddata/gaap_trends_2019

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