All You Can Eat Is Starving To Death
November 2019 will be known as the last month of Netflix dominance prior to Disney+ and Apple TV+ debuting to the world.
In order to prepare for the oncoming competitor onslaught, Netflix announced plans to offer approximately $2.0 billion aggregate principal amount of junk bonds to pay for its future content spending. This means Netflix’s long-term debt will be around $12.3 billion. Netflix hasn’t paid down any significant amount of its debt and the interest on that debt is increasing — $135.5 million just for Q1 2019, or around 3 percent of revenue.
Even if Netflix gets all the subscribers it can handle, it’s business model is still unsustainable.
Unlike WeWork which crashed and burned or Uber that is hemorrhaging cash, Netflix will be able to pay it’s debts when it finally fails.
Netflix will sell what it had as all you can eat to keep it from starving to death: it’s original content.
And who will buy it? The competitors it’s trying to beat.
This is all ironic when it was Disney who tried to acquire Netflix in 2017 only to inspire Disney to compete head to head. But before this happened, Netflix made Disney millions with the original content Netflix borrowed money to create based on it’s Marvel intellectual properties — such as Luke Cage, Jessica Jones, and Daredevil.
So that means not to worry that this might be the last year to binge-watch the next seasons of Ozark, Altered Carbon, Stranger Things, or Queer Eye. These shows won’t suddenly end like Bloodline did. You will simply find them in a year or two releasing these series on Amazon Prime Video, Hulu, Disney+ or Apple TV+.
Netflix.com as a domain will be simply a redirect.
I remember Wednesday, July 11, 2001, the day that Napster died and how everyone used the last 24 hours of Napster’s operating hours to download as much pirated music as possible.
I can see the same happening to Netflix.
The day Netflix goes down, pirates will show up in droves as the content is ripped off and put on peer to peer sharing sites until new seasons appear on competitor streaming sites.
But as Disney+ is busy debuting new Star Wars content such as The Mandalorian and the Obi-Wan series will anyone notice?
And remember in the end, when Napster died who was it that ultimately benefited? Steve Jobs. All those songs download back in 2001 from Napster, now exist in the iCloud.
All you can eat creates cannibals.
