via pjmedia:
Just yesterday, a friend and I were marveling at how we used to meet up with people at crowded events before we all had cell phones. We know we used to do it, but how? As a kid, I loved studying maps and planning routes for trips. Now, though, I can’t imagine attempting to travel somewhere without the crutch of GPS telling me when and where to turn. Technology changes and technology changes us. Likewise, Netflix has changed our TV viewing habits and, if history holds true, Netflix itself is bound to change and give way to newer technology. And that day may be coming sooner rather than later for Netflix.
For the most part, Netflix has overtaken civilization’s TV and movie watching while experiencing few bumps in the road. The streaming behemoth holds their cards close to their chests, so it’s hard to know exact numbers. But, according to one article, Netflix has 137 million subscribers and reaches over 300 million people. That’s worldwide, of course, but still. That’s a lot of eyeballs.
The same website reports that 23% of adults in the U.S. stream Netflix daily. Ask executives at traditional TV networks if they’d like to have 23% of adults watching their network. Of course, the heads of ABC, NBC, CBS, and Fox would love to have 74 millions adult viewers (that’s not counting children and international viewers) watching their shows on a daily basis. From all accounts, Netflix is trouncing them, not to mention cable networks.
With all that good news, though, is it possible that Netflix is in trouble?
Possibly surprising some, the answer is, yes, Netflix is beginning to find itself in increasingly troubled waters.
First, Netflix is beginning to find itself straining at the never-ending push-and-pull of the outrage crowd. Having weathered the fury over their possibly suicide-glorifying show 13 Reasons Why (I haven’t watched it) with just a few scratches and bruises, Netflix finds itself in uncharted waters with the outrage over an episode of Patriot Act With Hasan Minhaj.
After essentially being ordered by the government of Saudi Arabia to pull the episode that mocks the country’s crown prince, Netflix caved. Now, Netflix is finding itself the focus of growing ire from both the right and the left.
.@netflix caves to Saudis, censors Muslim comedian over Khashoggi jokes: @MartinaMarkota — t.co/Mmy0t4fzjw | #tcot #comedy #Islam pic.twitter.com/MD8TBCYjRA
— The Rebel (@TheRebelTV) January 4, 2019
However, Netflix’s issues with the growing outrage mob are the least of the company’s worries. First and foremost, Netflix’s massive debt is the proverbial chicken that will soon come home to roost. According to NYT’s Jeff Sommer,
All of those movies and TV shows are expensive, and in order to fuel its explosive expansion, the company has been spending faster than it has been taking in cash — and expects to keep doing so for years. Netflix has built its business on a mountain of junk-rated debt.
In his article, Sommer quotes New York University finance professor Aswath Damodaran, who warns, “Netflix’s fundamental business model seems unsustainable. I don’t see how it is going to work out.”
Already posting debt north of $12 billion, Netflix released a statement this past October unveiling plans to take on another $2 billion in debt. After Netflix issued their statement, CNBC explained that the tech giant “is fueling its ballooning cash burn with $2 billion in new debt.”