IN looking at the Cash Flow Statement of their 10-K (p. F-6), for year 2010, the biggest decrease in cash is the "Acquisition of streaming content library" -($406). I believe this trend will continue, and the "acquisition of streaming content library" will increase significantly. The amortization of content library is not a cash event, so it is an addition to the net income +$300. Other big hitters include AP which is +$139, means they have better terms in paying or whatever, so it is a positive.
If you look at "Cash flows from investing activities", see the "acquisition of DVD content library", in 2010, is has decreased from year 2009. I suspect that the trend will also continue.
Another way to look at the gap between Net Income and OCF (operating cash flow) is the ratio. If I take OCF/NI, for year 2010, 2009, 2008 - 171%, 280% , 342%. This "could" signal aggressive accounting. I am NOT saying that NFLX is doing anything illegal, but the above metric is one of the thing is doing forensic accounting work.
It doesn't matter, I don't give a ratsass why this stock will go up, but it will. Let the execs at netflix worry about profits, all I care about is cashing in on the upward movement of the stock. Can anyone here tell us why YOKU is up today. Who f-ing cares, the we longs made money.