Netflix – heading for bad ending?
DESPITE boasting 100 million global subscribers and a stack of award-winning series, Netflix is in big trouble.
The streaming giant is haemorrhaging money at an alarming rate, with debts totalling $A25 billion.
Its pursuit of paying customers, coupled with spending a small fortune annually on producing new content, is adding up. The LA Times reported Netflix has almost doubled its spending this year and expects to splash more than $A7.5 billion in 2017.
While most investors are not concerned, some analysts are concerned the bubble is at risk of bursting.
With 104 million subscribers worldwide, experts fear growth could stagnate soon. Hit series such as Orange Is The New Black and House of Cards (pictured) are owned and produced by others and Netflix pays licensing fees. That is not a business model that provides good cash “ample cash flow” and there are no signs a better strategy is on the horizon.