In thinking about the most successful U.S. companies of the past few years, one likely wouldn't take long before landing on Netflix as an answer, considering just how universal the company's services have become at this point. After all, its streaming content is estimated to be worth around $11 billion. But the word success doesn't always imply "financially lucrative," and for all of its laudable qualities and accolades, Netflix is currently sitting on a mountain of debt that has surpassed $20 billion.
After building up its initial revenue stream through shipping DVDs and Blu-rays to subscribers, Netflix entered the streaming TV game like someone starting up a round of Monopoly. In the half-dozen years that the company has been producing original content, it has annually taken out massive loans in order to fund the next batch of new shows, movies, documentaries and comedy specials. (Sometimes more than once per year, too, to the tune of somewhere between $5-$6 billion.) Some of this overarching debt has undoubtedly been paid back, since Netflix would presumably owe way more otherwise, but the payback calendar isn't moving at the quickest pace.
Netflix's debt is spread out across both short-term and long-term borrowing, with nearly $16 billion accounting for the former, and nearly $5 billion making up the latter. As a comparison of sorts, Netflix is looking to spend almost $6 billion on content across the entirety of 2017, which sounds a lot better to viewers than if the company's execs would spend that money covering its debts. And while all those financially dour numbers involved are dramatically higher than they were just a few years ago -- partially due to an increase in international programming -- so too are some of Netflix's more positive statistics.
For instance, Netflix now has 104 million subscribers around the globe, which is over 25 million more than it had when 2016 was getting underway. Compared to the $1.7 billion cash outflow the company had last year, it's expected to rise up to $2.5 billion in 2017, according to the Los Angeles Times, and Netflix's stocks have been impressive following the company's bigger-than-expected growth in subscribers in the first two quarters of the year.
But Netflix will have to keep cranking out major hits like Stranger Things and the various Marvel shows like Luke Cage and Daredevil in order to keep those positive numbers growing, as opposed to focusing on smaller shows that do better with critics than widespread audiences. And the more Netflix focuses on original shows, instead of paying for licensed series from other networks, the easier it will be to make a profit. Plus, they might want to figure out that whole movie situation, since it seems like there could be easy money there.
A number that big is enough to twist my stomach into a Gordian knot, but being responsible for a $20 billion debt is obviously (and thankfully) well beyond any job duties I have. I might play a small part in offering advice for what to watch on Netflix, but I'm perfectly comfortably only shelling out the current subscription fee to make that programming happen. Netflix plans on oozing moolah for years to come in order to attain the subscriber base that would be able to balance such a massive debt, and we'll be right here waiting to see if it can be done. Someone give Jason Bateman's character from the new drama Ozark a call if any of that money needs to be laundered, too.
While Netflix continues ramping up its I.O.U. count, the company will also continue pumping out awesome original TV shows and movies, which you can check out in our 2017 Netflix schedule. When you're done with that, check out our summer premiere rundown and our fall TV schedule to see what else is hitting the small screen in the near future.
