Netflix’s Bonds Have More Fun

So exactly how deep in the hole does a company have to go before it stops looking like the next Amazon and starts looking like the next MoviePass?

But, you say, Amazon stayed in the hole for almost two decades before it became consistently profitable. True enough, but unfortunately not every company that takes on massive debt turns out to be Amazon. (Also: Netflix is also more than 20 years old!)

Who wouldn’t become an entertainment goliath if we could take out a $2 billion bond on top of $10 billion in debt to fund a bunch of new shows? Give me one billion with no expectations of results and I promise you I’ll get myself on the cover of the NYT Magazine as the greatest innovator and disruptive genius Hollywood has ever known.

Netflix may yet turn out to be the Amazon of entertainment, not just standing astride the market like a colossus but actually vanquishing all the competition. At which point, its executives can control the entire market and cut spending or raise rates as it suits the company and its shareholders.

If we weren’t absolutely sure that driving everyone else out of the business was what they are after, if Reed Hastings’ comments last year that Netflix’s only real competition was “sleep” didn’t make that clear, then how’s about this headline:

Not just all of TV, but all entertainment is a spent force soon to be sold off for spare parts. If the goal were merely to conquer the TV networks, then what would be the point of this multi-billion dollar movie-a-week fiesta? Whom is that competing with?   Not to mention General Taback’s death march across the sands of Oscardom.

Now, off the top of my head, I can think of about 30 reasons why Netflix won’t become the Amazon of entertainment. Here’s a few of them:

1. Unlike Amazon on its way up, there are major, entrenched players producing all kinds of entertainment that people are still hungry for, with beloved characters and stories, that they’ll have to somehow shove into the ash heap of history.

2. Unlike Amazon, Netflix will actually have to vanquish Amazon.

3. The cost of entry to entertainment will forever remain: an idea, a couple people pretending to be something, a video camera, and access to the internet.

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