Quote:
Originally Posted by jfman
https://www.forbes.com/sites/greatsp.../#17d0a07b2886
Interesting thoughts from Forbes.
Netflix has debt of $200 per subscriber. No wonder they’ve put their prices up.
I’m not predicting doom and gloom for Netflix but it clearly can’t exist in the “low cost” subscription model forever.
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I currently own Netlfix shares and I see it going either two ways:
1. They collapse under their debt mountain before generating a penny in profit.
2. Their subscriber numbers continue to accelerate upwards allowing free cash flow to bring down their debts and who knows, even make a profit at some point before 2100.
Obviously, I prefer option 2, but its a high risk game they play. But Disney's service doesn't start until the end of the year and it will be several years, if at all, before they can catch Netflix, in my opinion. That's what I'm betting on. First mover in any field is still a major advantage.
At some point they have to stop spending all that money and hope they have enough content to keep existing subscribers and attract new ones.