Board 8 > Netflix is carrying $20 billion in debt.

(+) Yeah! (+)

http://www.latimes.com/business/hollywood/la-fi-ct-netflix-debt-spending-20170729-story.html

When Netflix was founded, the Internet was young, DVDs were popular and no one considered watching a movie streamed online.

Twenty years later, Netflix’s transformation from an underdog DVD-by-mail service to Hollywood powerhouse — one that has redefined how TV and movies are produced and consumed — has been remarkable.

The global streaming giant today boasts some impressive stats: 104 million subscribers worldwide, up 25% from last year and almost quadruple from five years ago. Its series and movies account for more than a third of all prime-time download Internet traffic in North America. Its more than 50 original shows garnered 91 Emmy Award nominations this year, second only to premium cable service HBO.

But there’s another set of numbers that could spell trouble for the company’s breakneck growth. Netflix has accumulated a hefty $20.54 billion in long- and short-term debt in its effort to produce more original content. The Los Gatos, Calif.-based company hopes more new shows will capture more subscribers, its primary revenue driver. It’s also under pressure to keep spending on new shows as streaming rivals such as Amazon and Hulu expand their own slates of original programming.
The result is that Netflix is burning through cash at a growing clip. The company is pouring money into expensive prestige projects and expects to spend at least $6 billion in content this year. Its net cash outflow this year is forecast to grow to as much as $2.5 billion, up from $1.7 billion last year. Reflecting its growth, Netflix recently moved its Southern California headquarters into a 14-story building in Hollywood.

So far, investors have expressed approval of Netflix’s spendthrift ways. They are betting that debt financing in the near term will create growth and yield big results down the road on the theory that you have to spend money to make money.

Netflix shares surged more than 10% this month after it reported better-than-expected subscriber growth. For the year, the stock is up nearly 50%. It closed Friday at $184.04, up $1.36 or 0.74%.

But some industry experts are warning of a Netflix bubble that may burst if the company fails to produce enough hit series to keep attracting new subscribers.

More at the link. Interesting stuff.
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Oh, this part was funny, though.

“I don’t believe Netflix is going to get this right at a better rate than anyone else,” said Michael Pachter, a Wedbush analyst who has long been pessimistic about the company. He said his “underperform” rating on Netflix shares has been wrong in the past but believes the company’s lavish spending will eventually catch up to it.

“I think it is kicking the can down the road and a looming write-down is coming,” he said.

Netflix confirmed to dominate the world by 2027, I guess.
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I'd be happier if they could host movies forever. I'm the kind of guy who could watch Die Hard or Jurassic Park a couple times a week for life

Jeff Zero posted...

Oh, this part was funny, though.

“I don’t believe Netflix is going to get this right at a better rate than anyone else,” said Michael Pachter, a Wedbush analyst who has long been pessimistic about the company. He said his “underperform” rating on Netflix shares has been wrong in the past but believes the company’s lavish spending will eventually catch up to it.

“I think it is kicking the can down the road and a looming write-down is coming,” he said.

Netflix confirmed to dominate the world by 2027, I guess.

Pachter has been wrong before. It's not necessarily bad to have that much debt. They're taking a risk that could pay off...will be interesting to see how it plays out.
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I've never used Netflix before
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I am very skeptical that Netflix even has that much room left to grow its subscriber base.

Like theyre betting on pretty sizeable gains that simply may not be there.
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Got to spend money to make money
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Eddv posted...

I am very skeptical that Netflix even has that much room left to grow its subscriber base.

Like theyre betting on pretty sizeable gains that simply may not be there.

If I remember correctly, this is true in the US, but they have a lot of room to brie internationally.
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Shaduln posted...

Eddv posted...

I am very skeptical that Netflix even has that much room left to grow its subscriber base.

Like theyre betting on pretty sizeable gains that simply may not be there.

If I remember correctly, this is true in the US, but they have a lot of room to brie internationally.

And the production of Fuller House and Atypical is really gonna help with that China market?
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It's all because of House of Cards season 5
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netflix has created a significant amount of international content

whether or not its effective, idk, but they have

Eddv posted...

Shaduln posted...

Eddv posted...

I am very skeptical that Netflix even has that much room left to grow its subscriber base.

Like theyre betting on pretty sizeable gains that simply may not be there.

If I remember correctly, this is true in the US, but they have a lot of room to brie internationally.

And the production of Fuller House and Atypical is really gonna help with that China market?

People learning English like to watch American TV shows to practice. I know a lot of Chinese people who like Full House actually!
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EndOfDiscOne posted...

Jeff Zero posted...

Oh, this part was funny, though.

“I don’t believe Netflix is going to get this right at a better rate than anyone else,” said Michael Pachter, a Wedbush analyst who has long been pessimistic about the company. He said his “underperform” rating on Netflix shares has been wrong in the past but believes the company’s lavish spending will eventually catch up to it.

“I think it is kicking the can down the road and a looming write-down is coming,” he said.

Netflix confirmed to dominate the world by 2027, I guess.

Pachter has been wrong before. It's not necessarily bad to have that much debt. They're taking a risk that could pay off...will be interesting to see how it plays out.

That's his point. Pachter is ALWAYS wrong. Therefore, Netflix will take over the world instead of die.
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Pachter sounds like the sort of guy who would have looked at Amazon in its early years not turning a profit and said "Yep, this company is doomed."
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This is kind of a big, scary headline that doesn't mean much. Netflix added 25 million subscribers between 2016 and 2017. Netflix have over 100 million paying subscribers. Most of this is short-term debt. Yawn.
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Sounds p normal tbh
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iiicon posted...

This is kind of a big, scary headline that doesn't mean much. Netflix added 25 million subscribers between 2016 and 2017. Netflix have over 100 million paying subscribers. Most of this is short-term debt. Yawn.

I find the article's content fascinating despite the tryhard nature of the headline itself.
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iiicon posted...

This is kind of a big, scary headline that doesn't mean much. Netflix added 25 million subscribers between 2016 and 2017. Netflix have over 100 million paying subscribers. Most of this is short-term debt. Yawn.

Wait, they brought in a quarter of their entire base just this year?
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They pretty much single-handedly funded Star Trek: Discovery, and have exclusive rights to it everywhere except the US and Canada, so that should bring in a few more subscribers in September.
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Yo.
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rekt
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I was kind of wondering what they were doing with starting like 50 new shows of their own in like a year
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I'm looking at the 2.5 billion net cash outflow with more worry than the debt
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