Netflix is building one of the most substantial treasure troves of video in Hollywood, and the value of its content has more than doubled in the last two years, according to new research by Morgan Stanley.
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The value of Netflix's video library has more than doubled in the last 2 years, as it spends billions (NFLX)
The value of Netflix's library of video content has more than doubled in the last two years, according to research from Morgan Stanley.
Netflix CEO Reed Hastings.
The firm's analysis shows Netflix's content library is currently worth around $12 billion in net assets for the first quarter of this year.
By comparison, Netflix's library was worth a total of $5.7 billion in net assets .
And that's not just old shows and movies Netflix is licensing from established players.
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The streaming service's original content (including acclaimed shows like "GLOW" and "Stranger Things") has become central to its growth.
According to Morgan Stanley, at the end of 2015, original content made upQ1 of this year, however, the ever-expanding, original-video trove now counts for 14
Netflix's original programming began in 2013 with its release of the first season of "House of Cards." The move was spurred by the realization that streaming rights for traditional TV and movie content would become increasingly expensive in the coming years, making production of original content a more profitable and cost-effective way forward for the service.
Since then, Netflix has poured billions into a rapidly expanding reservoir of original shows, movies, and standup specials.
But that has required a lot of cash up front.
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In 2017, Netflix expects to have a negative free cash flow of $2 billion to accommodate its continued investment in original content. While such a large negative short-term FCF has raised eyebrows on Wall Street, Netflix CEO Reed Hastings has insisted that front-loaded costs for the content will breed positive results in the long term.
Hastings has also shown signs of refining the expansion of the service's original programming by taking the axe to absurdly expensive shows like "Sense8" and "The Get Down."
In the end, according to a recent statement from the service's investment in original shows remains "pretty consistent" with
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