Netflix and loss aren’t words that appear together in many stories about the streaming giant. The platform is constantly buzzing in coverage online, has a string of hits on its fairly young roster of shows, and might be one of the only platforms to surprise people when a show is canceled. This practice is changing, of course, and there could be a good reason for it according to the LA Times. In their pursuit of more subscribers and quality original programming, the streamer has accrued a long-term and short-term debt that totals $20.54 billion. And while the company can tout “104 million subscribers worldwide,” they’re still hoping for more to keep the wheels turning and investors happy:
The company is pouring money into expensive prestige projects and expects to spend at least $6 billion in content this year. Its net cash outflow this year is forecast to grow to as much as $2.5 billion, up from $1.7 billion last year. Reflecting its growth, Netflix recently moved its Southern California headquarters into a 14-story building in Hollywood.
So far, investors have expressed approval of Netflix’s spendthrift ways. They are betting that debt financing in the near term will create growth and yield big results down the road on the theory that you have to spend money to make money.