Netflix spends a large amount of money on content every year and the budget goes up with every year as well. It spent $12 billion creating original TV shows, movies, documentaries, and more in 2018. This number is going to rise to $15 billion in 2019. Probably in 2020 as well.
The company’s Q4 2018 earnings report revealed that it spent $12.04 billion in cash on content just last year alone. That in itself was a 35 percent increase from the $8.9 billion that it spent on content in 2017.
Wall Street analysts predict that this figure is now going to climb by 25 percent to hit $15 billion in 2019 on a gross cash basis. The company told investors that it will continue to spend, which should not be a surprise. They have to keep that content coming after all. It expects to post negative $3 billion in free cash flow this year which will be similar to last year. It will fund this spending rate by going to the debt markets again. Its long-term debt stood at $10.4 billion at the end of last year.
Original content drives subscriber growth so it is a must. This spending should cool off in the coming years but it is expected to hit a peak of almost $18 billion next year.
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