Netflix announced Oct. 23 its intention to offer US $1.6 billion of senior notes (debt securities) to institutional buyers, with the debt intended to fuel its content acquisitions, production and development plans.
The global streamer announced it will use the proceeds from the offering “for general corporate purposes, which may include content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.”
In its quarterly report last week, Netflix said it will spend $7 to $8 billion on content in 2018. The report stressed that the company’s future “lies in exclusive original content,” with its chief content officer Ted Sarandos stating in a call with investors that the streamer intends to release 80 original films in 2018.
In a letter to shareholders, Netflix addressed how linear networks including MTV, A&E and WGN are cutting down on scripted series. “Last year, the number of original scripted series on linear TV (across broadcast, premium and basic cable) began to decrease as online services ramped up activity,” read the statement. “It’s an exciting period and both media and technology companies see the same big opportunity as we do.”
Other factors Netflix must weight going forward include Apple’s plans to reportedly spend $1 billion in original content as well as the launch of Facebook’s Watch tab for original videos.
“We have a good head start but our job is to improve Netflix as rapidly as possible to please our members by earning their viewing time and to stay ahead of the competition in the decades to come,” said the company.
Last month, the federal government announced Netflix will invest $500 million to Canadian content production over the next five years. In a company blog post, Netflix indicated that the investment will be spent on both service and original production.
With files from Playback