Net­flix – head­ing for bad end­ing?

Port Douglas & Mossman Gazette - - BUSINESS -

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.

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