Netflix raises $2b in debt to fund more content
Debt at streaming giant has increased to US$12.43 billion.
- Published by David Knox
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- Filed under Streaming
Netflix is raising another US$2 billion in debt for the production, development and potential acquisitions of content.
The streaming giant routinely raises debt to help grow its catalogue of original titles. Netflix also offered $2 billion in new debt back in April after issuing another round of notes several months earlier. The company is now on track to spend a total $15 billion on movies and TV series this year.
The move comes as Disney, WarnerMedia, Apple, and NBCUniversal are all set to enter the international SVoD arena.
Netflix acknowledged the imminent onslaught of competition just last week.
“The launch of these new services will be noisy,” executives said in their quarterly letter to shareholders. “There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance.”
In September, Netflix reported that its debt of US$10.36 billion had increased to US$12.43 billion in nine months.
Source: Advanced Television, mxdwn.com
4 Responses
For me the novelty has long worn off and in reality I find myself just watching a handful of series on Netflix a year – there is such a thing as too much content and in a way the more that is out there the less I watch as I tend to choose a bit more wisely now.
I think the revenues are still more than covering the debt but in a way it would do the market good for the Netflix bubble to burst.
I don’t think the increasing numbers of studio production companies would want Netflix reducing content Brekkie, and streamers like Netflix have brought a much needed catalogue of UHD and HD titles to our small screens. Waiting for FTA to increase HD content would have taken years without competition, and SVoD is that competition. There are many titles available on Netflix and some research is necessary to find specific shows and movies, which includes some good non English language content too, even though reading subtitles is not for everyone. Mexican soaps have become an addiction for my other half and here are over 100 episodes available for some shows.
Can’t wait for the moment where the networks will start paying Netflix, Amazon and the major streamers to have their content available and played on their services. I know Friends is heading back to their original broadcaster for streaming but still… I believe it’ll flip back! People will only want to have a main group of apps for streaming, Netflix plus two others or go back to a Cable Subscription where you have it all bundled! Apple TV+ perhaps
Logically Netflix will have to rationalise its business plan at some point in the future. Spending millions on movies and shows that really only deserved a B-Grade budget is just one case in point needing review, there are many examples of budget entertainment, especially from countries more used to counting dollars, and they still make ratings winning shows. Netflix don’t need ex box office stars to gain publicity for itself just products that sell themselves by word of mouth. ‘You must see that show’ said often enough will get their subscriber numbers up but more quickly than self indulgent or expensive arthouse movies, or hiring Martin Scorsese to break the bank hiring his best acting mates. Mind you Apple+ and Amazon Prime are spending up big too so any future sinking ship could be a big one.