Netflix has announced it is seeking to raise $1.5 billion in the form of new debt so it can further improve its catalog of content. Knowing that original titles are highly valuable to Netflix, it is likely that the majority of money will go towards the production of new series.
Even though Netflix has found great success during the past several quarters, raising new capital is far from a new strategy to finance original content. Last year, Netflix put out requests for more than $1 billion multiple times and had no problems earning returns. More than $8 billion has been spent on original content this year already, with that number steadily creeping towards the tens of billions.
In the official statement from Netflix, it is stated that the new capital will go towards "content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions." From the Q1 2018 earnings statement, Netflix noted that "we will continue to raise debt as needed to fund our increase in original content."
As major series like House of Cards come to an end, new content must be created to attract new subscribers. In addition to originals intended for streaming, Netflix may also be gearing up for showing its own content in theaters.
As Netflix continues to expand, it is becoming a more global business. International streaming revenue nearly matched revenue collected from US subscribers during the first quarter of this year and is predicted to exceed domestic revenue during the second quarter for the first time ever.
In total, Netflix surpassed $11 billion in revenue throughout 2017 and is on track to eclipse that this year. A greater number of original series could help drive even further expansion into international markets and provide quality entertainment to existing subscribers.
https://www.techspot.com/news/74282-netflix-raising-15-billion-even-more-original-content.html
