NETFLIX PURSUES LG EXPANSION PLAN DESPITE MOVING DVD DIVISION TO SJ - MERCURY NEWS

The town council was scheduled to consider a proposal Monday night to build an office park on Albright Way and Winchester Boulevard that would serve as a new corporate headquarters for Netflix. Albright Way is across the street from the Courtside Club.

Developers submitted new plans last week that called for phase 1 of the proposed project to include a four-story, 128,000-square-foot building and a five-story building that comes in at 156,000 square feet. A three-story parking structure is also included in the revised plans.
Developer John Shenk asked for flexibility in planning the office park, saying he would like permission to put a 168-unit senior housing complex on the site if there is not enough demand for commercial space. In the latest revision, Shenk lowered the housing component's height from 70 to 50 feet
Netflix, meanwhile, announced on July 22 that it is moving its DVD division to San Jose, leaving 800 employees at its current headquarters at 100 Winchester Circle. According to Los Gatos town manager Greg Larson, the DVD division's move means that by the end of the year the town will no longer be receiving sales tax revenues from Netflix. In the past, that has totaled as much as $3 million annually, but that revenue has been declining steadily due to the company's recent rate restructuring and the growth of streaming video.
Larson said, "With the approval of a new Netflix headquarters, we will be trading a declining

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revenue stream for a much more stable and growing source of support for the entire community, including our schools."News about the proposed new headquarters and the DVD division's move to San Jose, however, took a back seat to what Netflix subscribers have been saying about the company in recent weeks. Customers are outraged over the company's rate hikes that in some cases amount to a 60 percent fee increase. The backlash is expected to cost Netflix tens of thousands of customers.
Netflix said it expects to sign 401,000 new domestic subscribers this quarter, compared to the 1.8 million added in the second quarter.While Netflix said it finished the second quarter with more than 25 million customers in the U.S. and Canada, the company's stock tumbled on the news.
Netflix is also getting more competition from the nation's largest retailer. In response to the customer backlash against Netflix, Walmart moved quickly and began streaming movies online last week from www.walmart.com.


Source: http://www.mercurynews.com/rss/ci_18597474?source=rss


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