<i>Annual Report:</i><p>A corporation's annual report is usually a colored, professionally presented, and marketable document intended for an audience of shareholders.<p><i>10-K:</i><p>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.<p>Source: <a href="https://www.investopedia.com/ask/answers/102714/what-are-differences-between-10k-report-and-firms-own-annual-report.asp" rel="nofollow">https://www.investopedia.com/ask/answers/102714/what-are-dif...</a><p>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:<p><a href="https://www.investor.gov/introduction-investing/investing-basics/glossary/annual-report" rel="nofollow">https://www.investor.gov/introduction-investing/investing-ba...</a><p>Disclosure / Shameless Plug:<p>I run <a href="https://Last10K.com" rel="nofollow">https://Last10K.com</a> which is an SEC.gov alternative for investors to find and read 10Ks more efficiently.
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 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.<p>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 outsourced the work.<p>One thing that happened was that the annual report was turned into a plain accounting report which reported the needed information. Tada, no one really complained, people that needed the information got what they needed and a few hundred thousand dollars was saved every year. It never came back.
One of the reasons might be, that the SEC mandated all filers to submit the reports in XBRL Format starting in 2009 (foreign private issuers using IFRS followed 2017). It’s called Interactive Data by SEC and requires to tag each and every value with an XML element to give it an accounting meaning. The XBRL tools have not been able at that time to convert PDF or InDesign files, so all reports look rather ugly since then. I’m head of development team that invented a PDF Tagger; we sold it like warm bread during last month, because all EU listed companies are also mandated to submit iXBRL now. Btw, the cover page always looks that ugly because it must be the „form“ template from SEC.<p>Here is a link to a more pretty report, also having XBRL tags: <a href="https://www.gleif.org/assets/components/xbrl-viewer/gleif-annual-report-2019/ixbrl-viewer.signed4.htm" rel="nofollow">https://www.gleif.org/assets/components/xbrl-viewer/gleif-an...</a>
Flashy 10-Ks are hugely annoying, especially in IFRS where there’s no standard. Give me tables all day every day. The lack of standardization in financial reporting already sinks enough of my time.
I don't know where this blog is getting their data from, but Netflix's 10-K filings have never been highly designed.<p><a href="https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001065280&type=10-K&dateb=&owner=exclude&count=40&search_text=" rel="nofollow">https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&C...</a>
I understand the point of the article, but if you're serious about reading company statements you (at least at first) skip all promo material / preso-looking pages and skip to the part looks the most boring. Literally, don't even look at them (at first). Or even better you can do it the Buffett way, read from the end to the beginning.
My guess is that Netflix was still trying to establish itself. Many investors probably were skeptical to invest in Netflix so they wanted to create something more splashy to engage people.<p>At some point Netflix went from a niche service to being a mature established company that people are going to seek out. The splashiness was no longer needed.
I think it was honestly just a trend. Back then you used to have design students making annual reports for fun so they'd have something to pad out their portfolios. I'd wager that sort of thing is now towards the bottom of the list for most.
Why not doing two versions of the annual reports? One in plain text to meet the regulator’s requirement and the other one, shorter but more creative for the general audience and building of brand awareness? I believe it’s totally worth it.
I'm sure people here will recognize that a boring 10-k is easy for bots to parse and enter into computer systems that most users end up using. In fact 10-ks should probably have standardized XML format or similar for this.
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.
I think it's the difference between paying the word processing department (if those still exist) to edit last year's document and paying for what amounts to an expensive marketing campaign that few people are going to see.