Netflix (NASDAQ: NFLX ) bears often point to the company's more than $5 billion in streaming content liabilities as a "ticking time bomb" that will eventually pose a severe threat to the company's health. Competitors such as Amazon.com (NASDAQ: AMZN ) are entering the streaming video market, and the resulting bidding wars have driven up the price of content.
Furthermore, Netflix has recently been growing its library of original content, to differentiate itself from other streaming video services. For example, after Netflix lost the rights to a variety of children's shows from Viacom (NASDAQ: VIAB ) , it struck back by signing a deal for several original children's series from DreamWorks Animation (NASDAQ: DWA ) . However, these original series tend to be even more expensive than the content they replace.
The Motley Fool's consumer-goods bureau chief, Isaac Pino, recently sat down with Fool contributor Adam Levine-Weinberg to discuss Netflix's streaming content liabilities and whether they pose a threat to the company. In the following video, Adam explains why Netflix's content liabilities are so high, and what investors should look for going forward.
The rise of Internet TV has given Netflix and Amazon.com opportunities to become major players in the new television landscape. Netflix has been investing heavily in original programming in an attempt to disrupt traditional TV networks, while today's TV industry leaders are looking to bolster their positions. The Motley Fool's new free report "Who Will Own the Future of Television?" details the risks and opportunities for Netflix and its competitors in tomorrow's television market. Click here to read the full report!