Netflix got a lot of attention last year by declaring its intent to spend $6 billion on content in 2017. But that’s not a true reflection of the cash the company is actually shelling out.

Through about 2011, the money Netflix spent on content each year was roughly equal to the amount the company expenses each quarter in its profit-and-loss statement. However, that changed starting in late 2012 with Netflix’s spending on original content, which is very different from the way it pays for licensed content.

With licensed content, the streaming company has generally been able to arrange to pay in a manner that aligns with the way it accounts for content costs in its P&L statement — a little bit at a time over the life of the content. But with original content, Netflix has to fund the whole expense out of pocket from day one, meaning that almost all of the cash cost is incurred before the content is even available.

source: Company Reporting, jackdaw research Analysis and estimates

As a result, whereas Netflix’s cash outlay on content was once considerably less than its total cost of revenue specified in the company’s income statement, it is 25% to 30% higher as of the last few quarters.

If what Netflix spent on original content relative to its total content expenditure were to remain the same in the near future, that cost wouldn’t necessarily be an issue. But chief content officer Ted Sarandos has indicated he’s looking to raise the portion of original content on the company’s platform to half its total roster over the coming years. That means spending more and more cash up front.

Thus, while Netflix has been profitable at a net income level for a number of years, it’s now burning through cash at a tremendous rate. The company’s preferred metric in this area is free cash flow, and both the dollar amount of losses and the margins those imply have been worsening over time, with a brief blip in the first quarter of this year. Its total net outlay over the last four quarters was $1.8 billion.

source: Company Reporting, jackdaw research Analysis and estimates

This rapid shift from licensed to original content is the single biggest difference between Netflix and, say, HBO, whose spending on originals has remained constant in percentage terms over the past five years. Even Amazon isn’t spending at nearly the same levels as Netflix, and it has a massive e-commerce business to generate cash.

Netflix has publicly anticipated “many years” of negative free cash flow and doesn’t forecast turning that around until it has reached a much larger revenue base. That means the strategy is entirely dependent on the company’s continued ability to grow rapidly and expand its margins. But if its growth trajectory slows or its cost of content increases faster than anticipated, Netflix will find its current ability to keep raising more debt seriously compromised.

Jan Dawson is the founder and chief analyst at Jackdaw Research, an advisory firm for the consumer technology market.