Netflix (NASDAQ:NFLX) has spent its way to success.

The company has built a global subscriber base of 99 million paid members, adding about 5 million in its most-recent quarter alone. It has also grown revenue by over 30% each of the past four quarters, and the streaming leader expects those gains to continue as it grows around the world.

Netflix has accomplished this by shifting from a strategy of licensing already-aired television shows and movies to producing its own. That's an expensive proposition, but one which the streaming giant has so far been very successful with. It's also a potential money pit if the company produces more pricey failures like Sense8 and The Get Down.

Television, including Netflix, has always been hit-driven, and companies traditionally go through hot and cold cycles. The problem for the streaming leader is that as it has built up its massive audience it has also accumulated $20.54 billion in long-term debt and obligations, according to the Los Angeles Times.

The Netflix home screen

Netflix has been very successful with original content. Image source: Getty Images.

Is Netflix a house of cards?

When things are going well, investors rarely worry about a growing company piling up debt. That's the price of doing business in a digital world where bigger is better, and a huge profit tomorrow is a more noble goal than success today.

To grow across the world, Netflix has invested heavily in original content, with the company pushing to own even more of its "Originals" outright. After initially working with outside production houses on Netflix Originals, including Orange is the New Black and House of Cards, the company has increasingly pushed production of shows including Stranger Things to its in-house production studio.

Under that plan, when a show is a hit the company has an asset it fully owns, which may pay off for decades. Of course, when you have a show like The Get Down, which cost $200 million for its single season, according to Deadline, you have burned a lot of cash with little to show for it.

What is Netflix doing?

Netflix has $4.8 billion in long-term debt and another $15.7 billion in obligations, according to The Times. Those numbers aren't going to improve anytime soon. In fact, after having $1.7 billion in negative net cash outflow in 2016, it expects that number to grow to around $2.5 billion this year.

That's a lot cash for a company that showed net income of $66 million in its most recent quarter, and $363 million over the past-four quarters put together. Netflix is in a growth phase, where in theory it's spending to build a content library. At some point that library of shows becomes a draw in itself and the company can cut back on new content.

Netflix will never eliminate content as an expense -- ongoing subscribers will always need to be entertained. But at some point the sheer vastness of its assets will let it produce less new shows.

How bad could it get?

The closest parallel to Netflix that has been around for a long time is Time Warner's (NYSE:TWX) HBO. That premium network has also been a big spender when it comes to content because it needed premium offerings to attract subscribers. The difference, and it's a very important one, is that for many years the way cable worked made it somewhat difficult to drop HBO, or any other premium channel.

In some cases subscribers got HBO as part of a contracted package price, making dropping it before the contract expired impossible. In other cases it was simply a hassle to cancel because it involved a phone call, complete with a customer service rep working hard to keep you from leaving.

Netflix does not have that advantage. If it fails to produce new programming that keeps subscribers engaged they can cancel for a month, a few months, or forever without coming back.

The biggest risk facing Netflix may be becoming a service people use for a month or two a year in order to catch up. That behavior has plagued WWE's (NYSE:WWE) network, which sees major dips and jumps in customers based on which events it has scheduled in a given month.

Netflix needs to remain a must-have for customers, and that means keeping the pipeline stuffed with shows people don't want to miss. If it can do that, then debt, even a lot of debt, won't matter. But if hits turn to misses, maintaining this level of spending may be impossible, causing a sort of negative chain reaction for the company.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.