A new contest also means that Netflix will likely have less licensed content to round off its library. Disney, for example, has said that it extracts its content from Netflix before releasing its service.
There are some big investments with this money. Netflix recently poached TV giants Shonda Rhimes and Ryan Murphy for exclusive content, for example.
Netflix said it expects negative free cash flow of approximately $ 3 billion this year and expectations for next year are similar. Free cash flow measures how much cash is generated after the company has invested in its business.
Netflix shares rose 8% the day after last week's earnings announcement, but the price has since fallen again. 19659009] Moody's has issued the latest BA3 or "junk" rating, but added that Netflix could eventually pay off its debts as the transition from licensed content to original content would be removed and newer international markets would help The results show that Netflix's strategy of building its own original content library "has positive long-term implications," adding that a library of proprietary content, rather than just licensed content, is valuable to both consumers and investors.
There are risks, however. Moody & # 39; s said it could further downgrade Netflix if the negative cash flow is still high or if competition undermines its subscriber base.