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How Netflix burns $10 million a day

Netflix CEO Reed Hastings once called his company a "rerun TV" company. Its transformation into an original content machine is impressive — and really expensive.

Data: YCharts, FactSet; Note: Share price adjusted for stock splits; Chart: Harry Stevens/Axios

It takes about 2 years for a new show to go from production to screen. That means 2 years before Netflix sees a single cent in the form of marginal subscriber revenue from any given original show.

Driving the news: Netflix expects it will burn a bigger-than-expected $3.5 billion this year. Hastings sees the epic cash burn as a good thing for the company; still, he has reassured investors that 2019 will mark be “peak” negative free cash flow for his company.

  • The near-consensus view for Wall Street's Netflix bulls is that its cash burn ultimately doesn’t matter, especially if it's consistently growing its subscriber base.

By the numbers: Judging by the stock's performance since Netflix went public in 2002, investors like Netflix whether the company is burning huge sums of cash or not.