Netflix remains a juggernaut in terms of movie and TV streaming, with more than 104 million subscribers worldwide and continued stock growth from investors. Yet according to an LA Times piece over the weekend, Netflix is also deeply in debt. We're talking $20 billion in debt.
That's a big Twinkie.
David Ng reported that Netflix has accumulated $20.54 billion in long-term debt and other financial obligations. Things are fine for now since the company is still growing, but if subscriber and streaming numbers slow down, the reduced growth could lead to a Netflix bubble bursting. This will likely mean a sequel to The Big Short in five years, which will debut exclusively on Hulu.
In the future, Netflix hopes to have 50% original content, which would save on licensing movies and television programs not made in-house. That means more shows like Stranger Things and perhaps even Netflix-financed films like Bong Joon-Ho's Okja. Yet there have been a few cancellations of Netflix originals, notably Sense8 from the Wachowskis, that seemed surprising. It may hint at the limits of what Netflix is able to support despite its current success and growth. At least Sense8 is getting a two-hour series finale in 2018.
Growth isn't infinite, especially when Netflix seems to be collecting revenue solely through monthly membership fees. It'll be interesting to follow Netflix's business in the coming years and see how they choose to adapt. What happens when those subscriber numbers plateau? What happens if investors aren't happy and the incoming cash starts to dry up?
As a Netflix subscriber since the year 2000 or 2001, I suddenly feel guilty for reporting those DVD copies of The Saragossa Manuscript and Breaking the Waves as lost over a decade ago. I found them months later in a box while moving. Clearly that was the beginning of all this.