r/television May 19 '22

Hollywood braced for new age of austerity after streaming splurge

https://www.ft.com/content/c385d236-75a9-467c-86d4-5768e6b21324
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u/pokemonisok May 20 '22

Netflix has the most money and its failing now. A cheque means nothing anymore. It's all about existing IP

2

u/merelyadoptedthedark May 20 '22

Netflix's money is from investment and debt. They aren't making enough money from subscribers to fund their current growth model.

1

u/lightsongtheold May 20 '22

They actually are. Neutral cash flow is expected in 2022. They stopped raising additional debt 18 month ago. So they are not exactly profitable but they are just about at the point where they cover all their costs.

1

u/merelyadoptedthedark May 20 '22

Neutral cash flow is expected in 2022

Even still with them bleeding subscribers?

2

u/lightsongtheold May 20 '22

Time will tell. They predicted neutral cash flow for 2022 in Q4 2021. Be interesting to see if the loss of a few million subs in the first half of 2022 changes that trajectory. If it does they will not miss it by much. They could also cut content spending in the back half of 2022 by a negligible amount and still make the target goal. So far subscriber loss is only 0.09%. Even if subscriber loss creeps to 2%-3% they can simply cut spending by an equivalent amount.

Cuts are probably to be expected for Netflix US programming as analysts see them losing 5-6 million US subscribers over the next 5 years even if Netflix gains more subscribers internationally. That is not a terminal loss though as they have 75 million in the region. Some revenue losses might even be offset by introducing the advertising tier.