Netflix is on a relentless pursuit to gain more viewers, and are taking on a considerable amount of debt in the process. This leaves them with less margin for error than ever before, as they attempt to build the largest video subscription service in the world.
The streaming giant is taking on large amounts of debt to fund their yearly promise of $6 billion in original programming. So far the company’s investors haven’t seemed fazed by the spending, due in large part to their continuing growth of subscribers. However, some analysts are beginning to warn that Netflix could be beginning to overextend itself.
Reed Hastings, CEO of Netflix, came up with the current strategy, and the debt burden is not a concern with Wall Street until subscription rates slow.
The company has already borrowed billions of dollars to pay for original series’ such as “Stranger Things”, but doing so has helped more than triple their global audience over the last four years. As of September, the company had a total of 109 million subscribers around the world. This figure includes the 5.3 million subscribers who signed up from July through September alone.
The news exceeded all analyst projections and lifted the company’s stock to all new highs.