NEW YORK (US) – Netflix Inc has said its global subscriber base crossed 200 million at the end of 2020, adding that it will no longer have to borrow billions of dollars to fund its broader slate of TV shows and movies.
The streaming firm’s shares rose 13% in extended trading. The financial milestone was proof enough of the company’s strategy of going into debt to take on big studios in Hollywood with a deluge of its own programming in multiple languages.
Less than a decade ago, the biggest streaming service in the world had raised $15 billion through debt. The firm said on Tuesday that it expected free cash flow to break even this year. “We believe we no longer have a need to raise external financing for our day-to-day operations,” it said in a letter to shareholders.
The firm said it would look into returning excess cash to shareholders through share buybacks. It has plans to maintain $10 billion to $15 billion in gross debt.
“This is in sharp contrast to Disney and many other new entrants into the streaming market who expect to lose money on streaming for the next few years,” said eMarketer analyst Eric Haggstrom.
Last year, as it debuted hugely acclaimed series “The Queen’s Gambit” and “Bridgerton,” a new season of “The Crown” and the George Clooney flick “The Midnight Sky”, Netflix signed up 8.5 million new paying customers between October and December.
With the addition of new subscribers, Netflix membership across the world has touched 203.7 million. In fact it added more subscribers in 2020 than in any other ever since its inception in 2007.