Streaming giant, Netflix, has published its 2015 report revealing how much money they own to media companies that allow them to stream movies and television shows.
The phenomenon surrounding Netflix has been going on in the United States, and upon entering 2016 the rest of the world is now able to stream movies and television shows wherever and whenever they wanted. Binge watching became a trend, and more and more people are subscribing for Netflix's services. However, the kind of amusement that Netflix has been giving to its subscribers has a price: and it's worth more than a usual subscriber can imagine.
Recently, the streaming giant released its annual report for the year 2015, and it shows that it owes media companies a staggering $10.9 billion in content costs. 91% of the said figure is due within three years, and $4.7 billion is due in the next succeeding 12 months.
Netflix CEO Reed Hastings and Ted Sarandos, Chief Content Officer, are surely tied in a billion-dollar knot with this predicament. International Business Times described the scenario by comparing the programming budgets of popular networks to the amount of money Netflix owes. FX has an annual programming budget of $1 billion, while HBO spends $2 million a year.
To cite how much money Netflix spends on its programming, HBO said it has lost twice on bidding, once for the Aziz Ansari-fronted comedy "Master of None," and the period drama "The Crown."
The big question is: how can Netflix possibly pay this huge amount of debt in schedule? According to Hedge Accordingly, there could be two ways that they can do it, one is by debt financing and one is to hike its subscription prices again, even if they only did it last October.
In February 2015, the company raised $1.5 billion by describing a return of investment of 5.5 percent and 5.875 percent on bonds that are promised to be paid out in 2022 and 2025.
