Netflix has spent at least $8 billion on content last year! Netflix plans on taking on $2 billion in new debt. Consumers may not understand that this new price increase could help keep investors! The price increase could possibly help ease concerns with a growing deficit on free cash flow. It’s likely Netflix will continue to spend costly amounts on content. Last quarter Netflix expected negative free cash flow of $3 billion in 2018. They also have similar expectations for this year! Free cash flow measures how much cash is generated after the company covers investments in its business. It seems as though this may be paying off for Netflix in one important way! Last quarter Netflix had more than 58 million subscribers in the US, 137 million globally. Projection by Netflix last fall was that subscribers worldwide will jump to 147 million. In a report last week Jaffray’s Michael Olson wrote that “The streamer will add more subscribers in the U.S. than Wall Street is expecting.” Netflix will reveal more about its latest subscriber numbers Thursday when it reports earnings. There will be some new developments to the formula as well. Netflix will no longer highlight “Free Trial” for the service, Netflix says this adds “noise to our membership forecasts.”
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