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Yes, Netflix owes $20 billion

Wars are expensive.

The internet is aflutter with the "news" that Netflix has $20 billion of debt, leading to a sudden rush to question whether the company is doomed or about to collapse or cancel its big shows. 

First off, Netflix doesn't have $20 billion in debt. Netflix has $4.8 billion in debt, and then deals with content partners for $15.7 billion. Notable difference, but, yes, Netflix is going to need to pay out that money.

That said, this isn't some sudden surprise. Netflix's finances have been closely examined by a small army of analysts and financial journalists. Some think the company's spending too much, other think they're right on track for global domination. 

Owing money, whether in the form or debt or deals with other content companies, is just part of the plan.

In less than a decade, Netflix has changed the entertainment business, as well as how people think about the future of media. Now, it's on the cusp of becoming the first truly global media network. You don't do that without spending a lot of cash. 

And you don't get a lot of cash without taking on some debt.

That money is being plowed into two main areas: expansion and content. Netflix has been expanding aggressively into foreign markets and has mostly been successful. The company now has more non-U.S. subscribers than U.S. subscribers. Meanwhile, it's spending big on making new shows, bringing in comedy specials, and experimenting with big names like Chelsea Handler. 

To do that, Netflix has been borrowing a lot of money that will need to be paid back. And it's spending that money faster than it's making money right now.

Can Netflix go on like this forever? Nope, but that's not the plan.

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