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Silicon Valley's Netflix Is $20 Billion Dollars In Debt Because Of Greedy Hollywood August 2. 2017
Netflix Netflix television and internet streaming service is hemorrhaging money. The California based company is $20 billion dollars in debt. Netflix, once hailed as a success, was plunged into massive debt when it decided to create original programming using greedy Hollywood players such as Adam Sandler, among others. Hollywood stars and executives began charging Netflix outrageous prices for creating what is average entertainment and it has put a big dent in the company's bottom line. You would think Hollywood would be happy about another revenue stream in the face of sharp sales declines. However, some in Hollywood decided to take Netflix for all its worth. Hollywood is milking the Silicon Valley company for all its worth and giving it awards and nominations in exchange, which does not compensate for damaging their business model. Netflix is getting the short end of the stick. So are its investors. Another problem impacting the company is rampant password sharing. People are passing out their passwords to family and friends, costing Netflix a fortune. A Netflix executive unwisely stated he is okay with password sharing. To stream the enormous amount of content Netflix does on a daily basis requires a massive amount of hardware and electricity. Add salaries and other overhead costs and every bit of revenue is needed to cover bills and turn a profit. STORY SOURCE Netflix is ‘bleeding cash’ thanks to hits such as Stranger Things: Streaming service builds up more than $20 billion in long term debt and obligations Published: 10:08 EDT, 31 July 2017 | Updated: 15:19 EDT, 1 August 2017 - Global streaming giant Netflix is 'bleeding cash' thanks to producing original content like Stranger Things and has built up more than $20billion in long-term debt and obligations. Netflix has more than doubled its spending this year and is expected to toss more than $6billion on its slate of programming in 2017, according to The Los Angeles Times. Its negative free cash-flow of $258 million for the same quarter last year, and $423 million for the quarter ending March 30, increased to a company-record negative $608 million for the quarter ending June 30. Netflix has a debt of $4.8billion verse their equity market value of about $75billion. The streaming giant hopes that more subscribers will be captured by producing more shows. Netflix's aggressive pursuit of obtaining paying customers has seemingly paid off. Global streaming giant Netflix is 'bleeding cash' thanks to producing original content like Stranger Things and has built up more than $20billion in long-term debt and obligations. The California-based company is up 25 per cent from last year with 104million global subscribers. But thanks to streaming rivals Amazon and Hulu, Netflix is under intense pressure to keep spending money on new shows as the other two companies expand their own original programming content. Due to that pressure, Netflix is splashing money into very costly projects this year, causing its net cash outflow forecast to grow to as much as $2.5billion. That number is up from $1.7billion last year... |
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