Netflix has accumulated more than $20 billion dollars worth of debt y’all.
According to the LA Times, Netflix has racked up a hefty bill of $20.54 billion in long term and short term debt in its effort to create more original content. The company hoped producing more original content would help increase subscriber growth which has been a contributing factor to revenue.
Despite having 104 million subscribers worldwide, some industry experts say Netflix may soon have to step into reality if they fail to produce hit shows. “Nobody is ever the dominant player forever,” said Mike Vorhaus, president of Magid Advisors, a media, and digital video consultancy. “I think they’re going to need some luck in not drowning in debt in the ultimate slowdown of growth.” A lot of Netflix’s expenses come from licensing TV series and movies.
Keep in mind some of Netflix’s hit shows like as “Orange Is the New Black” and “House of Cards” come from other production companies like Lionsgate and Sony pictures. The company is on a mission to produce more hit original shows like the ’80s-themed “Stranger Things” and the kid-centric “A Series of Unfortunate Events.”
Reports also say Netflix is set to spend more than $6 billion dollars on programming in 2017 despite being in debt.
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