Hey! Big spender
Netflix is off to the debt markets again as the content arms war hots up. The streaming giant has just announced plans to take on $2bn in new debt by offering unsecured bank notes. It’s the third time in a year that Netflix has raised debt this way.
There was a round in April for $1.9bn. And last October the company offered $1.6bn in notes.
The money will be used for “general corporate purposes” — which could include content acquisitions and production costs, along with other investments. Netflix is dropping cash like mad because the streaming market is getting more competitive.
Amazon and Apple both play in that space and next year Disney and Warnermedia division will launch their own streaming services.
The strategy is to have more original content — so that’s shows created, funded and owned by Netflix, like The Crown or Stranger Things, over licensed content, which is basically a huge collection of TV show reruns from a variety of sources. Think: Grey’s Anatomy, Friends or The Office.
Netflix actually attributes subscriber growth to its investment in original content. It has even hired (scratch that, I mean poached) mega TV producers including Shonda Rhimes and Ryan Murphy.
Now, the new issue follows a top quarter for the company. Last Tuesday the streaming pioneer said it had more