It turns out the global giant is not immune to debt as well and that sounds about right.
But first off, most have reported that the global streaming giant has $20 billion in dept. It doesn’t. Netflix only has 4.8 billion in debt and deals with content partners for $15.7 billion. There’s a difference. However, yes Netflix still does owe a lot.
With that in mind, this comes to no surprise at all. Netflix has been scrutinized by analysts as well as financial journalists in the past who think that the company is spending too much. But Netflix and its investors are not worried. It’s actually part of the plan for world domination and that’s not an expression either. Netflix is reported close to have 100 million subscribers last April and they probably reached or close to reaching that number right now making Netflix a global powerhouse despite the many competitors coming out of the scene.
From a mere underdog DVD service, the global giant has come a long way redefining the entertainment business by transforming how TV and movies are consumed in less than a decade. They also changed how people felt and think of about the future when it comes to consuming media and that internet with its live streaming service is the future. And this feat didn’t come for free and it came with a huge price but Netflix’s investors are not worried about it as Netflix continues its massive growth spending more money with no plans to slow down. Add to the fact that most companies do have debt. Apple as well has debt, about 100 million of it. Netflix doesn’t even have it more than others either. Netflix has claimed it has far less debt compared to other companies that are just as huge. However, it roughly has the same amount of debt to other media companies to be precise.
So where does all the money go to? It’s being funneled into mainly into two things which is expansion and content. The latter is very much obvious. For Netflix’s plans of world domination, it needs to aggressively expand to other foreign markets, which is quite successful because the company now has more non-US subscribers than US subscribers. And to keep its massive audience happy, Netflix has to continue updating and creating new content for its also massive library like creating new exclusive content, making comedy specials and also licensing other content. For Netflix to do this it borrows a heck of a lot of money and currently, Netflix still continues its plan to spend more money than what it is earning to continue being the global giant that it is.