You're talking about the difference between Profit and Loss (as in, the accounting report with the same name) versus Cash Flow (again, accounting report of the same name).
The difference exists because not all assets are cash. Yet a non-cash asset is carried on the accounting books at its cash value - the value of a building, the value of vehicles, equipment, inventory, even intangibles like the value of a copyright, patent, franchise, etc. Buildings are great, but you can't pay salaries with them, so you need to also mind the cash.
Here's a great example. Museum X has a $100,000 exhibit that doesn't fit their collection, but it belongs in Museum Y's collection, and will help Museum Y make a lot more money in the long run. Both museums make $4000 net profit each year.
I donated $100,000 to Museum X on condition that they give the exhibit to Museum Y. Unfortunately, it cost Museum Y $10,000 to prepare, move, and set up the exhibit. What does this do to both museum's cash flows vs P/L?
For museum X, it's a wash on their Profit/Loss Statement. They lost a $100,000 asset (the exhibit) but gained another (the cash), so these two things cancel each other out and it posts as a normal $4000 profit year. Different deal on their Cash Flow Statement. There, their cash flow leaps to $104,000. Wowza!
For Museum Y, their Profit/Loss statement is pure good news, because the new asset adds $100,000 of paper profit. They post a $94,000 profit - their normal $4000 profits, plus the $100,000 gift, minus the $10,000 cost to move it. Fantastic year on paper. It's a different story on their Cash Flow Statement - they are $6000 negative becuase of the cash outlay to move the exhibit.
Museum Y's patronage increases because of their new exhibit, which greatly improves their real cash income (cash flow and P/L) in future years.
What happens if you rely on the Profit/Loss Statement and ignore Cash Flow? Well, both museums would make bad decisions - Museum Y would get spendy when it has no cash, and Museum X would fail to realize they have a nest egg now.
With Netflix, they are pouring their cash into "exhibits" - these cost them a bunch of money up front, but will produce income for them for years later. These assets could even be sold. In effect, they are converting cash assets into fixed non-cash assets: a wash on the Profit/Loss statement, but a huge hit on the Cash Flow statement.
But that is normal for businesses. Ships aren't built to stay in harbor, and businesses aren't built to keep cash sitting around.