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Originally Posted by jfman
I don't think they'd die for the debt. Maybe with it though.
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Loads of companies have debt. AT&T has tons of it, but like Netflix, has the revenues to service that debt otherwise the markets wouldn't lend.
We've discussed this before, the critical point for the company is probably in around two years time when they start pivoting away from pumping money into content and start to balance their books. At the moment, that debt is helping to fund more content which in turn is helping to fund growth and there is no sign, yet, that growth is slowing, at least internationally.
---------- Post added at 21:40 ---------- Previous post was at 21:32 ----------
Quote:
Originally Posted by jfman
I’m sure the guys at Enron knew more than me too.
151 million customers is a lot, but they’re low value, highly price elastic customers. It’s a low cost add on for many. As Old Boy is always keen to point out many big players are about to enter this space and Netflix capability to withstand this is entirely untested.
With $20bn of debt, or about three years of revenue alone, I’d not be hugely enthusiastic at the minute and the recent dip in their share price reflects lower confidence among investors.
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The whole market was down and may go down more, substantially more, but that is short term.
On low value customers, they're about to get more! They're launching a mobile only tier in India for a few dollars, so that's very low value. But add up how many Indian mobile customers there are.... the pennies add up.
On other streamers, again been through this all before. As far as internationally, most of these services won't be launching for at least a year and then it will take at least another year before we see what kind of impact, if any, the new streamers have on Netflix. At that time Netflix will likely then have 200m+ customers.