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Netflix accumulates staggering amount of debt as original library grows

by Danny Zepeda | August 6, 2017

Netflix has become a budding powerhouse with an impressive catalog of movies and TV shows. That hasn’t coming cheap, however, as reports suggest the streaming giant is in debt for a staggering $20 billion.

As Netflix has been eager to find a stable footing with original content, it’s had to spend money. That’s just business. But $20 billion does seem like a lot, and if you couple that with the expected $6 billion in extra expenditure for more original content over the next year, that sum will only climb higher.

The old adage that you have to spend money to make money has never been truer for Netflix, but that’s not necessarily a bad thing. For starters, lets put that big number into context. Of the $20 billion, only $4.8 billion is actual debt—the remaining $15.7 billion is for deals with content partners. That sum will eventually have to be paid off, but it’s not outright debt.

Many factors go into Netflix’s big spending, including competition and global expansion, but the main takeaway is that Netflix is a healthy company that will still produce great original content for many years to come. Just this year alone, 13 Seasons Why and the Dave Chapelle stand-up specials generated all kinds of hype and views.

The Los Angeles Times also reported that Netflix’s net cash outflow is forecast to grow to $2.5 billion, a noticeable jump from the $1.7 billion amount last year. And that’s on top of Netflix reaching 104 million subscribers worldwide. Investors are happy with Netflix’s moves and are actually encouraging it to spend more money on original content.

On the horizon, Netflix has an impressive list of new movies and TV series arriving including Marvel’s The Defenders, David Fincher’s Mindhunters and the second season of Stranger Things.

LA Times Mashable

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Danny Zepeda

Danny's interest in writing began with tech, which influenced his career path in college. After graduating from Vanguard University, he began to...Danny's interest in writing began with tech, which influenced his career path in college. After graduating from Vanguard University, he began to...