Netflix, Inc. (NASDAQ:NFLX) has inked an agreement with Walt Disney Co (NYSE: DIS) to put Disney’s content on the streaming platform next month. The deal gives Netflix exclusive access to stream Disney’s theatrical releases, including “Zootopia,” “The Jungle Book,” and “Captain America: Civil War.” The deal is estimated to be worth about $300 million a year to Disney.

Netflix’s business model is simple. The company pays for content and then charges a monthly subscription fee to access it. Some content is licensed from third parties, some is produced by outside studios, and some is produced by Netflix itself. Netflix will spend about $6 billion on content this year.

In order to justify its valuation, Netflix needs to both continue to grow quickly and generate an exceptional return on invested capital. Netflix has aggressively expanded its streaming business in the U.S. and abroad, has a brand that’s well known, and owns an extensive library of exclusive content. It is important for Netflix to keep spending on its content to outperform the competitors.

The company’s opponents are intensifying their game. The US market is saturated with streaming services, some of which offer content Netflix doesn’t have. With Amazon, Hulu, HBO, Starz, and other competitors battling Netflix for content, content costs are going to be tough to rein in. Through the first six months of this year, Netflix’s operating cash flow was negative $455 million.

During the second quarter, the company saw a massive decline in subscriber growth. For the third quarter, Netflix expects to add just 400,000 new paid subscribers in the United States and 2.1 million internationally. Overall, Netflix’s subscribers rose to 83.2 million from 65.6 million during the past 12 months.

The company now has 47 million subscribers in the U.S. alone. Management anticipates that its domestic member base will eventually peak between 60-90 million subscribers. Earlier this year, the online streaming service expanded to more than more than 130 new countries. By 2020, Netflix expects to have roughly 75 million international users.

Shares of Netflix fell as much as 15 percent after the streaming company reported weak second quarter earnings. The company’s shares have plummeted more than 18 percent year-to-date. However, the shares have gained nearly 11 percent since July. Shares of Netflix were trading higher by nearly 3 percent on Thursday.

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