Netflix needs Dave Ramsey... they are $20B in debt!
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Young_Chitlin
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Global streaming giant Netflix is more than $20billion in the red and 'bleeding cash' thanks to producing original content like Stranger Things.
Netflix has more than doubled its spending this year and is expected to toss more than $6billion on its slate of programming in 2017, according to The Los Angeles Times.
Its negative free cash-flow of $258 million for the same quarter last year, and $423 million for the quarter ending March 30, increased to a company-record negative $608 million for the quarter ending June 30.
The company has accumulated a whopping $20.54billion in long- and short-term debt in its effort to create and produce more original content.
The streaming giant hopes that more subscribers will be captured by producing more shows.
Netflix's aggressive pursuit of obtaining paying customers has seemingly paid off.
The California-based company is up 25 per cent from last year with 104million global subscribers.
That's also nearly quadrupled from five years ago.
Netflix has more than doubled its spending this year and is expected to toss more than $6billion on its slate of programming in 2017, according to The Los Angeles Times.
Its negative free cash-flow of $258 million for the same quarter last year, and $423 million for the quarter ending March 30, increased to a company-record negative $608 million for the quarter ending June 30.
The company has accumulated a whopping $20.54billion in long- and short-term debt in its effort to create and produce more original content.
The streaming giant hopes that more subscribers will be captured by producing more shows.
Netflix's aggressive pursuit of obtaining paying customers has seemingly paid off.
The California-based company is up 25 per cent from last year with 104million global subscribers.
That's also nearly quadrupled from five years ago.
Plus, Netflix garnered 91 Emmy Award nominations this year for more than 50 original shows.
Their nominations this year are second only to premium cable service HBO.
But thanks to streaming rivals Amazon and Hulu, Netflix is under intense pressure to keep spending money on new shows as the other two companies expand their own original programming content.
Due to that pressure, Netflix is splashing money into very costly projects this year, causing its net cash outflow forecast to grow to as much as $2.5billion. That number is up from $1.7billion last year.
Despite the company spending billions, the LA Times reports that investors have 'expressed approval' of the expensive moves.
In July, Netflix's shares increased more than 10 per cent after it reported 'better-than-expected subscriber growth,' the LA Times reports.
The company's stock is up nearly 50 per cent, as it closed on Friday up $1.36 at $184.04.
Netflix is not going to slow down anytime soon with spending loads of money, as the company is investing more money into self-produced original series like Stranger Things and A Series of Unfortunate Events.
According to the LA Times, executives say the goal is to 'increase the portion of self-produced originals to 50 per cent of its slate in an effort to own more of the shows on the platform.'
'That's a lot of capital up front, and then you get a payout over many years,' Netflix Chief Executive Reed Hastings said in a recent investor call, the LA Times reports.
'The irony is the faster that we grow and the faster we grow the owned originals, the more drawn on free cash flow that we'll be.'
The result is that the company expects 'to be free-cash-flow negative for many years', which means that it will continue to bleed cash for the foreseeable future, the newspaper reported.
Millions of their expenses go to licensing movies and television series, as most of their popular shows are licensed from other studios even though it's marketed as 'Netflix Originals.'
For example, Orange is the New Black is actually produced by Lionsgate, while House of Cards is from Media Rights Capital - an independent film and TV studio.
Sony Pictures Television production is behind The Crown, and Iron Fist is created by Marvel.
The licensing fees for the exclusive rights to stream those popular shows is paid by Netflix for an undisclosed amount.
The company is spending more money in self-produced originals with the hopes and goals of becoming independent of the other studios.
Netflix has recently been canceling pricey shows like Sense8 and The Get Down.
However, the streaming giant has said it has renewed 93 per cent of its content and plans to approve more new shows at a fast pace.
The emphasis on the new shows will somewhat cater to its overseas subscribers.
Currently, Netflix has 52million subscribers outside of the United States.
The company is also spending millions on A-list Hollywood talent for content.
Famed director Martin Scorsese is working with Netflix on The Irishman, which is estimated to cost $100million.
Their nominations this year are second only to premium cable service HBO.
But thanks to streaming rivals Amazon and Hulu, Netflix is under intense pressure to keep spending money on new shows as the other two companies expand their own original programming content.
Due to that pressure, Netflix is splashing money into very costly projects this year, causing its net cash outflow forecast to grow to as much as $2.5billion. That number is up from $1.7billion last year.
Despite the company spending billions, the LA Times reports that investors have 'expressed approval' of the expensive moves.
In July, Netflix's shares increased more than 10 per cent after it reported 'better-than-expected subscriber growth,' the LA Times reports.
The company's stock is up nearly 50 per cent, as it closed on Friday up $1.36 at $184.04.
Netflix is not going to slow down anytime soon with spending loads of money, as the company is investing more money into self-produced original series like Stranger Things and A Series of Unfortunate Events.
According to the LA Times, executives say the goal is to 'increase the portion of self-produced originals to 50 per cent of its slate in an effort to own more of the shows on the platform.'
'That's a lot of capital up front, and then you get a payout over many years,' Netflix Chief Executive Reed Hastings said in a recent investor call, the LA Times reports.
'The irony is the faster that we grow and the faster we grow the owned originals, the more drawn on free cash flow that we'll be.'
The result is that the company expects 'to be free-cash-flow negative for many years', which means that it will continue to bleed cash for the foreseeable future, the newspaper reported.
Millions of their expenses go to licensing movies and television series, as most of their popular shows are licensed from other studios even though it's marketed as 'Netflix Originals.'
For example, Orange is the New Black is actually produced by Lionsgate, while House of Cards is from Media Rights Capital - an independent film and TV studio.
Sony Pictures Television production is behind The Crown, and Iron Fist is created by Marvel.
The licensing fees for the exclusive rights to stream those popular shows is paid by Netflix for an undisclosed amount.
The company is spending more money in self-produced originals with the hopes and goals of becoming independent of the other studios.
Netflix has recently been canceling pricey shows like Sense8 and The Get Down.
However, the streaming giant has said it has renewed 93 per cent of its content and plans to approve more new shows at a fast pace.
The emphasis on the new shows will somewhat cater to its overseas subscribers.
Currently, Netflix has 52million subscribers outside of the United States.
The company is also spending millions on A-list Hollywood talent for content.
Famed director Martin Scorsese is working with Netflix on The Irishman, which is estimated to cost $100million.
Comments
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lmao Amazon Studios will buy them , watch
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Blockbuster smiling down from heaven
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Yo, I was wondering how NetFlix was spending on this money on original programming, but not really changing the way they charge. I guess this is why you still get commercials on Hulu even though you're paying for a subscription.
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Advertisers are salivating. A chance to interrupt your binge with commercials.
They will also likely hike up prices too. Netflix might be worth 2 or 3 more bucks to most people. -
Commercials don't bother me.
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Seems to me they are "spending money to make money". Not a bad idea if their plan is successful. Once they can trim licensing fees, that will open up doors for more avenues of streaming entertainment.
Scar face is ready to shake Sosa and go into business for himself. I can't see any company spending that much money without having a plan for an even greater return. The key is original content and subscription expansion.
Seems like a decent plan over time and only time will tell if it pans out. -
This isn't as bad as it seems. They'll be alright
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A whole bunch of ? they keep investing in.
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Advertisers are salivating. A chance to interrupt your binge with commercials.
They will also likely hike up prices too. Netflix might be worth 2 or 3 more bucks to most people.
They will definitely hike the price. It was $8 four years ago. Jumped to $12 at the start of this year. -
I bet Amazon raised the cloud prices on Netflix
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The Lonious Monk wrote: »Yo, I was wondering how NetFlix was spending on this money on original programming, but not really changing the way they charge. I guess this is why you still get commercials on Hulu even though you're paying for a subscription.
You can pay $11.99/month (total) for commercial-free Hulu. -
This is isn't anywhere near as scary as it sounds. Tons of giant companies are in "debt". Apple is currently 100 billion dollars in debt.
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*makes more to buy stock in Netflix*
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Kodi gang
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All them free trials are catching up
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Y'all know what this means, right?
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I could tolerate a small price hike but commercials would be a deal breaker
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So much for sharing passwords
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Kodi killing
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obnoxiouslyfresh wrote: »So much for sharing passwords
U got jokes.. -
They went through something similar about 7 years ago, just about went out of business, bounced back, and became a household name. They'll be alright.
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There are articles saying Netflix is in trouble every year.
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Their subscribers continue to grow.
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Their content costs were lower than expected so they're actually in less-debt than planned.
