Netflix Has a Spending Problem
Netflix (NASDAQ: NFLX) has bought its way into a leadership position in the content space. Unlike key rival Walt Disney (NYSE: DIS), which has been amassing its content library since 1937 when it released "Snow White and the Seven Dwarves," the streaming leader has only been building its library for the past several years.
A streaming company needs programming that people want to watch to win and keep subscribers. Netflix started out by licensing that content, but it is being forced more and more to produce its own originals.
That's expensive, and an increasingly crowded marketplace where seemingly every entertainment company has launched (or plans to launch) a streaming service, hits are harder to come by. It's a reality that (along with international expansion) has pushed Netflix to spend more each year, arguably for diminishing returns.
Source Fool.com
