Despite boasting 100 million global subscribers and a stack of award‑winning series, Netflix is in big trouble.
The streaming giant is losing money at an alarming rate, according to fresh reports about its business strategy, with debts totalling a staggering AU$25 billion.
Its pursuit of more and more paying customers, coupled with spending a small fortune annually on producing new content, is adding up.
The LA Times reports that Netflix has almost doubled its spending this year and expects to splash more than AU$7.5 billion on its slate of programming this year.
With 104 million subscribers worldwide, experts fear growth could stagnate sooner rather than later.
Even Netflix itself isn’t expecting to turn a profit for a while yet, recently admitting that it expects to be free‑cash‑flow negative for many years.
Expensive shows that failed to hit the mark with viewers and critics are starting to pile up, with Girlboss and The Get Down among the list of axed projects.
Its latest costly endeavour, the star‑studded comedy Friends From College, has not been as successful as expected.
And even those that have been well‑received have struggled to make back the money required to fund them.
The first of six seasons of the historical series The Crown, chronicling the life of Queen Elizabeth II, cost a staggering AU$163 million to make, making it the most expensive TV show ever.
And smash hit series like Orange Is The New Black and House of Cards are ‘original’ in the sense that Netflix commissioned them, but are owned and produced by others.
So essentially Netflix pays licensing fees — it won’t say how much — for its own content.
Source: News.com.au
