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Netflix is $20 billion in debtPosted:

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Hello, movie and TV show viewers alike. I've read some pretty shocking news about Netflix and it's that they are $20 BILLION in debt, according to the Los Angeles Times.

Netflix's enormous spending on original content has lead the streaming video platform to accrue $20.54 billion in short and long term debt. The company is expected to spend $6 billion on original content this year, with an undetermined budget spent on licensing fees for programs from TV studios. Its net cash outflow will increase this year to $2.5 billion, up from $1.7 billion, and the company expects "to be free-cash-flow negative for many years".

Investors seem content with Netflix's financial game plan and are hopeful that debt financing will "create growth" in the short term. The company has continued to build its base of subscribers paying for the service (104 million, up 25% from 2016) and gather critical acclaim for original shows - its programming won 91 Emmy nominations last year spread over 50 shows.

However, some industry experts are warning of a "Netflix bubble" if the platform's original content fails to keep attracting users. "I think they're going to need some luck in not drowning in debt in the ultimate slowdown of growth", said media consultant Mike Vorhaus, while analyst Michael Pachter warned of "a looming write-down".

Netflix has increasingly relied on debt for funds. Its long-term debt is $4.84 billion, double what it was last year. And its short-term debt, approximately $15.7 billion, reportedly isn't reflected in the company's balance sheets. From the Times, "In its most recent quarterly filing, the company said it has $8.2 billion in off-balance-sheet debt. The practice is a common accounting technique but it is also a way for companies to paint a rosier financial picture that may be the case."

The spending on original content is likely to increase in hopes of attracting more subscribers, and as TV networks rise the cost of licensing fees for shows to stream on Netflix. The company hopes to eventually build a library that's 50% Netflix originals, but experts warn that this would require a lot of time - possibly decades - as well as money.


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#2. Posted:
Loke
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I don't doubt it tbh

I like Netflix tho
#3. Posted:
Maj
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$20 Billion seems a little ridiculous. I believe this to be inflated for the means of a good news story.
Unlucky Netflix
#4. Posted:
Travis
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Holy shit. I didn't even know that lmao.
#5. Posted:
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Maj wrote$20 Billion seems a little ridiculous. I believe this to be inflated for the means of a good news story.
Unlucky Netflix


I don't believe so. They've got a few original content series and movies coming out this year. I don't believe it's $20 billion in debt but I do believe they're in the $10 billion+ debt mark.
#6. Posted:
JokingGamer
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I'm not surprised their movies are shite
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