Balance Sheet Components

Content Assets

Content assets consisted of the following:



	As of
	March 31, 2018		December 31, 2017
	(in thousands)
Licensed content, net	$	12,508,344	$	11,771,778

Produced content, net
Released, less amortization	1,643,252		1,427,256
In production	1,613,898		1,311,137
In development and pre-production	161,497		158,517
	3,418,647		2,896,910
DVD, net	14,334		13,301
Total	$	15,941,325	$	14,681,989

Current content assets, net	$	4,626,522	$	4,310,934
Non-current content assets, net	$	11,314,803	$	10,371,055

On average, over 90% of a licensed or produced streaming content asset is expected to be amortized within four years after its month of first availability.

As of March 31, 2018, over 30% of the $15.9 billion unamortized cost is expected to be amortized within one year and 29%, 79% and over 80% of the $1.6 billion unamortized cost of the produced content that has been released is expected to be amortized within one year, three years and four years, respectively.

As of March 31, 2018, the amount of accrued participations and residuals was not material.

Property and Equipment, Net

Property and equipment and accumulated depreciation consisted of the following:



	As of
	March 31, 2018			December 31, 2017			Estimated Useful Lives
	(in thousands)
Information technology assets	$	226,652		$	223,850		3 years
Furniture and fixtures	49,507			49,217			3 years
Buildings	40,681			40,681			30 years
Leasehold improvements	233,119			229,848			Over life of lease
DVD operations equipment	59,016			59,316			5 years
Corporate aircraft	57,938			30,039			8 years
Capital work-in-progress	12,885			8,267
Property and equipment, gross	679,798			641,218
Less: Accumulated depreciation	(337,866		)	(321,814		)
Property and equipment, net	$	341,932		$	319,404

Deferred Revenue

The Company’s primary source of revenues are from monthly membership fees. Members are billed in advance of the start of their monthly membership and revenues are recognized ratably over each monthly membership period. Revenues are presented net of the taxes that are collected from members and remitted to governmental authorities. The Company is the principal in all its relationships where partners, including consumer electronics (“CE”) manufacturers, multichannel video programming distributors (“MVPDs”), mobile operators and internet service providers (“ISPs”), provide access to the service as the Company retains control over service delivery to its members. Typically, payments made to the partners, such as for marketing, are expensed, but in the case where the price that the member pays is established by the partners and there is no standalone price for the Netflix service (for instance, in a bundle), these payments are recognized as a reduction of revenues.

Deferred revenue consists of membership fees billed that have not been recognized, as well as gift and other prepaid memberships that have not been fully redeemed. As of March 31, 2018, total deferred revenue was $673.9 million, the vast majority of which was related to membership fees billed that are expected to be recognized as revenue within the next month. The remaining deferred revenue balance, which is related to gift cards and other prepaid memberships, will be recognized as revenue over the period of service after redemption, which is expected to occur over the next 12 months. The $55.3 million increase in deferred revenue as compared to the year ended December 31, 2017 is a result of the increase in membership fees billed due to increased members and average monthly revenue per paying member.