Culture

Netflix $1.6bn bond debt for content and acquisitions

Netflix $1.6bn bond debt for content and acquisitions”

Netflix might have a lot of debt on its hands, but it seems like the company isn't the least bit afraid of going in the red, because the streaming service platform plans to spend around $8 billion to expand their original content budget for 2018.

NFLX will use the funds generated from the sale for "general corporate purposes, which may include content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions", it said in a statement.

Overall, Netflix said it would spend between US$7-8bn on content next year.

As part of its originals slate, Netflix expects to release around 80 films next year, according to chief content officer Ted Sarandos, up from about 50 this year. The company now has $17 billion in streaming-content commitments over the next few years, up from $14.4 billion for the year-ago quarter.

At the end of the quarter, the firm had US$4.9bn in debt.

Netflix's thesis: maintain a high cash-burn rate now to acquire original content across a broad ranges of genres and formats (including in-language regional programming), in order to bring more subscribers onto its rolls - especially internationally.

In last week's third quarter results, Netflix said it grew net subscribers by 5.3mln in the period to leave it with 109mln subscribers around the world.

The company's biggest subscriber additions were outside of the United States, which Ben Swinburne, head of media research at Morgan Stanley, told Business Insider is one of the more impressive parts of Netflix's business.

Netflix is raising another $1.6bn (£1.2bn) from investors to finance new shows and possibly make acquisitions.



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