The Problem with Netflix That Is Way Worse Than We Thought
According to reports, Netflix is in serious trouble with debts totalling a staggering AU$25 billion.
The streaming giant is boasting 100 million global subscribers and a stack of award-winning series but the LA times reports they are losing money at an alarming rate.
Netflix has almost doubled its spending this year and expects to splash more than AU$7.5 billion on its programming in 2017.
“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,” the article reported.
However, analysts are concerned that growth could stagnate sooner rather than later.
Even Netflix itself isn’t expecting to turn a profit for a while yet, recently admitting that it expects “to be free-cash-flow negative for many years”.
According to the LA Times report, Netflix hasn’t yet figured out a business model that provides “ample cash flow”.
There are no clear signs that such a strategy is on the horizon either.