Netflix has acquired $20.54 billion in long-term debt, according to second quarter SEC filings reported by the Los Angeles Times. One of the biggest buyers at the Sundance Film Festival this year, the streaming giant has increased spending on original programming in an effort to grow its subscriber base and compete with Amazon and Hulu. It is projecting spending $2.5 billion in net cash outflow for the year, up from $1.7 billion last year.
The company has many reasons to be confident: It has 104 million users worldwide, a 25% increase in subscriptions since 2016, and wracked up a whopping 91 Emmy nominations this year, just 19 of reigning leader HBO’s 110.
The company’s outrageous spending habits give new meaning to the old maxim, “you have to spend money to make money.” According to executives, the aim is for 50% of the site’s content to be original programming. “That’s a lot of capital up front, and then you get a payout over many years,” CEO Reed Hastings said. “The irony is the faster that we grow and the faster we grow the owned originals, the more drawn on free cash flow that we’ll be.”
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