Report: Netflix VOD service totaling more than 20 billion in debts

Report: Netflix VOD service totaling more than 20 billion in debts

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Netflix, the # 1 streaming service provider in the world, stands out thanks to a high-quality service and original content that has met with great success among the general public. However, the production of its out-of-the-ordinary series is expensive, very dear to the American giant, which today has more than 20 billion debts on the back.

Update August 2, 2017: The LA Times reports that Netflix had more than $20 billion in debt were in fact incorrect. Netflix said that the total debt of the service of VOD amounts in reality to $4.8 billion.

Watching movies and series immediately took on new flavors as soon as they arrived on the market of video-on-demand platforms. The VOD as it is called so, has simply revolutionized the way to view content on a daily basis, in return for a monthly subscription for only a few dollars.

Netflix reached 100 million total subscribers for the first time that has only jostled the world of audiovisual in general. What’s behind this success? It sticks to its original contents, which meet a monstrous success all over the world and attract more and more users, eager to make the discovery. Now the production of all these works has a cost and it is felt today in the case of Netflix.

Netflix: More than $20 Billion in Debt

Having more than 104 million subscribers in the world does not prevent Netflix from being in the red. It is precisely because there are so many users to join the ranks of the VOD platform, it is because the latter offers them films and series that are clearly out of the ordinary.

A little “exclusive” so to speak, but penalizes in quotation marks Netflix. Indeed, this desire to conceive more and more original content puts the American giant in a complicated financial situation, so that today, this one totals nearly 20.54 billion dollars of debts .

As the LA Times reports, this is due in large part to the fact that despite the “Netflix Originals” license, the majority of movies and television series are owned by other studios. These include “Orange Is The New Black” produced by Lionsgate, “House of Cards” from Media Rights Capital, “The Crown” owned by Sony Picture Television, or “Dardevil” and “Iron Fist” which belong to Marvel.

The fact that you have to pay license fees so that you can distribute these contents on your platform is a heavy burden in Netflix’s case. It seems in any case that this is the price to pay to get more and more people to its cause and thus peak to the rank of No. 1 in the world of VOD. Now to see if the debt will decrease or will continue to grow over time.

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Javier Davis produces news on stocks, currencies, bonds, commodities, and real estate. His in-depth research covers most of the major financial markets in America, Europe, and Asia. His research is based on the interconnected relationships among economic and technical factors that drive valuations in the markets, with an emphasis on how to formulate investment strategies. From interest rates to inflation to economic growth and much more, the fundamental concepts presented on this website provide an essential foundation of knowledge for investors to profit in stocks, bonds, commodities, currencies, and real estate markets.

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