With the big streaming war looming just beyond the horizon, Netflix is trying to pull out all the stops to ensure that they remain top dog amidst all of the competition. In fact, the company is now planning to take on another $2 billion in debt in an effort to fund even more of its original programming.
This latest increase only adds to the previous bill that Netflix already owes. As of this time last year, their total debt was reportedly hovering somewhere around the $12 billion range. That total’s obviously grown since then and now looks like it’s going to grow even more.
While this is good news for subscribers, who’ll likely get even more top quality content, it also deepens the mystery as to how Netflix actually makes a profit. The streaming platform is constantly spending money without ever incorporating advertisements or significantly raising the cost for customers. It’s miraculous how they can keep this up, especially given the fact that their value dropped $24 billion in less than a week over the summer.
Netflix likely feels that they have no choice but to take on this debt if they want to remain relevant. Apple, Disney, NBCUniversal and Warner Media are all set to launch their own streaming services in the near future, and these competitors will just add to a field that already features current heavyweights like Hulu and Amazon Prime Video, which puts Netflix in a tough position.
Things get even more dicey when one realizes that a lot of the content that people love on the platform will soon be headed to one of these new services. For example, both Friends and The Office are set to depart for NBCUniversal. Anything Marvel, Star Wars and Disney related will also be ditching Netflix in favor of Disney+.
Netflix is taking on all of this extra debt to try to make their original content more enticing than anything else their competitors have to offer and while how they’ll eventually pay it all back in the long run still remains to be seen, viewers should just be happy that they’re about to get a lot more phenomenal content heading their way soon.