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The Cost of Doing Business

Securing licensing agreements with TV networks, filmmakers and other content owners is arguably the greatest expense for Netflix. For example, the company spent nearly $200 million in 2011 for access to Disney films and TV programming for a one-year period. The full series of "Lost" cost the company $45 million, "Scrubs" came in at $26 million and "Desperate Housewives" totaled $12 million for a single year. The growth of Internet-based television has made it more difficult to purchase licensing inexpensively, and the company's current content licensing budget reflects this truth. In a statement to shareholders in early 2015, Netflix revealed that its budget for obtaining new licensing deals and renewing expiring arrangements for exclusive and nonexclusive content would exceed $6 billion through 2018.

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