How much money is it going to take to win the streaming wars? According to a recent article by the LA Times, Netflix has already incurred over $20 billion (with a “B”) in long-term debt — a figure greater than the national debt of most countries (though to be fair, over $15 billion of that is money owed to studio due to content contracts, which is actually tracked separately. Netflix themselves pegs their debt as $4.8 billion). And yet, Netflix has used this financing to generate some pretty extraordinary results:
“104 million subscribers worldwide, up 25% from last year and almost quadruple from five years ago. Its series and movies account for more than a third of all prime-time download Internet traffic in North America. Its more than 50 original shows garnered 91 Emmy Award nominations this year, second only to premium cable service HBO.”
My parents used to warn us kids, “Money don’t grow on trees…” (A sentiment typically expressed after we broke something valuable.) Netflix just laughs and laughs at such quaint adages — they simply went out invented a new kind of tree!
Related – Netflix Expects To Release A Whopping 80 Original Films Next Year
Apparently, Netflix feels this meager indebtedness isn’t sufficient for their global domination needs. Variety reports that Netflix has piled on another $1.6 billion to procure more original content in 2018! As we previously reported, Netflix is pushing for 80 new original films alone next year (in addition to all of these original series), which is a substantial step up from the 50 we are getting this year.
As one might imagine, the interest for all this debt is exceptional — over $163 million for just the first nine months of 2017. Fun with numbers! However, for all of Netflix’s gains in subscribers and content, the service still runs deeply in the red (and will for the foreseeable future). So while this year, their cost of original content is around $6 billion, next year’s will run closer to $8 billion, which isn’t unsubstantial.
Five years from now it should be fascinating to study how much all of these streaming services — Hulu, Netflix, Amazon, CBS All-Access, and Disney — have spent to win this content war (and learn who does and doesn’t survive too).
Do you enjoy reading these Hollywood finance and money articles? Let us know in the comments down below!
Don’t forget to share this post on your Facebook wall and with your Twitter followers! Just hit the buttons on the top of this page.
FOR FANBOYS, BY FANBOYS
Have you checked out LRM Online’s official podcasts and videos on The Genreverse Podcast Network? Available on YouTube and all your favorite podcast apps, This multimedia empire includes The Daily CoG, Breaking Geek Radio: The Podcast, GeekScholars Movie News, Anime-Versal Review Podcast, and our Star Wars dedicated podcast The Cantina. Check it out by listening on all your favorite podcast apps, or watching on YouTube!
Subscribe on: Apple Podcasts | Spotify | SoundCloud | Stitcher | Google Play
