Netflix is reported to be swimming in $20 billion of debt

Paterniano Del Favero
Agosto 2, 2017

Netflix "expects to be free-cash-flow negative for many years, meaning it will continue bleeding cash for the foreseeable future", the article claims.

Investors are said to be relaxed about the large debt since Netflix continues to build on subscribers; now 104 million subscribers use the streaming service.

Among its biggest spends lately: A reported $100 million for Martin Scorsese's "The Irishman", and $90 million for the upcoming Will Smith sci-fi movie "Bright".

Despite reports of the streaming service's massive debt and over-spending, according to a July 2017 Q2 letter to shareholders, Netflix experienced a huge growth in memberships.

Another part of the cost: The recent move from headquarters from Los Gatos, California to a 14-story building in Hollywood. 'House of Cards' is made by Media Rights Capital, 'Orange is the New Black' is produced by Lionsgate and "The Crown" comes from Sony Pictures Television. Not to mention all the Marvel shows, including the "The Defenders", "Daredevil", "Luke Cage", and "Jessica Jones".

Michael Pachter, a Wedbush analyst, told the Times he sees disaster ahead: "I think [Netflix] is kicking the can down the road and a looming write-down is coming". While other programs such as Hulu and HBO are giving the company a run for their money with the success of shows like Insecure or Game of Thrones, Netflix has seemed to maintain a steady following thanks to its original programming.

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