Reportedly Netflix debt amounts to over $20 Billion
Netflix debt is a shocking revelation.
From their humble beginnings of posting DVD’s you order online to becoming one of the favourite production companies, it seemed like Netflix was on the up and up.
Underneath the surface of innovation and original content the streaming giant is reportedly in over $20 Billion of debt.
This is in fact due to the company pouring money into expensive projects, namely their original content.
Netflix estimates an expenditure of over $6 billion on original content this year all to expand on its current number of 104 million subscribers.
Luckily for them, as subscriptions are their number 1 revenue driver, their number of subscribers has increased by 25% since last year.
Their methodology is: More original content= more subscribers=more revenue=more original content and less debt.
Netflix and bill?
Their plan is to increase their original content library to 50% of the entire Netflix library in hope of attracting more subscribers.
It’s an interesting concept that has industry experts worried as if they fail to produce popular and desired series it could worsen their debt.
Surely not every series is going to be as acclaimed as Stranger Things, which is returning in October, by the way.
They no doubt have a beautifully artistic approach to production but they may be flying before they can walk. By this I mean they are a fairly new production company pumping way too much money into a series before testing it out.
Their hip hop musical The Get Down cost $120 million to make the first season and has now been scrapped.
But I mean “hip hop musical”….
You can still make great content without spending so much money- at the end of the day it’s about a enthralling storyline that invokes the effect of addiction.
Let’s hope the Netflix debt can chill.