Season 3, Episode 8: Netflix (Part 1)
Acquired
00:00
Debt Covenants and Cash Cycle Management
Debt covenants are agreements on debt that require a certain level of financial health, and failing to meet these can lead to default and bankruptcy. Despite incurring heavy expenses to acquire subscribers, Blackbuster makes no revenue for at least a month after acquisition due to the free first month. To counter this, they run a Super Bowl ad without reducing prices, focusing on educating the market and successfully managing their cash cycle.
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