Netflix To Raise Debt By $800 Million For More Original Programming

– by Joseph Medina

The streaming service Netflix is sure in an interesting place. When they first started out, it seemed like they’d only be that: a streaming service. However, as soon as their base platform took off, they shocked the world when they threw their hat in the ring as an actual network, producing such quality shows as House of Cards, Orange is the New Black, Unbreakable Kimmy Schmidt, and a slew of Marvel shows. It’s now gotten to the point that the name Netflix is not only synonymous with streaming movies, but with quality original TV as well.

Given the strong branding with their properties, it’s hard not to call their moves a resounding success. However, at the end of the day, Netflix is the only who knows their true success, and even with the access to their numbers, they can only know so much. They’re the only ones who know just how many watches their content is getting compared to everything else, but there’s no way they can know if any rise in subscriber-ship is actually due to this content, or other unknown reasons. But a new story from Variety implies that things are A-okay over at Netflix.

According to the outlet, Netflix has plans to borrow $800 million more, raising their long-term debt to a whopping $3 billion. Netflix stated that the fund would be “for general corporate purposes,” but Variety goes on to state that a good chunk would actually be going to their long-term goal, which is to have 50% of their content be original. In short, a good portion will go towards original programming.

This is very much in keeping with the pattern we’ve seen at Netflix. Over the past year, it’s been oft-reported that the actual amount of content is dropping rapidly. Between shows being relegated to other networks’ respective apps on smart phones and smart TVs, and movies similarly being spread between paid services, they’re having a lot less in their library than they used to.

A report back in June showed that Netflix only offered 5,000 movies and TV shows. That sounds pretty good, but when you compare it to 2013 — which had 9,000 movies and TV shows — the difference is astounding. While some may shake their heads and see this as Netflix becoming less valuable over time, I see this as an indication of the inevitable.

Netflix was ahead of their time when they first moved to online streaming. As networks and studios became more comfortable with the ecosystem, however, they would create their own services — which would take away from Netflix’s library whether they wanted or not. As such, the move to create original programming, in retrospect, is certainly a smart, proactive move to ensure their longevity as studios/networks inevitable held their own content closer to their chest.

Some may have preferred that Netflix be more aggressive with their offers to the digital rights of newer films, but that would've been a short-term solution that would only lose them money down the line.

Given the current trends, the market is sure to fracture even more in the immediate future, and by the time that happens, Netflix will have plenty of content to make a subscription worthwhile. So while $800 million may seem like a hefty increase to an already huge debt, there is little doubt that this move will only do them favors in the long term. 

What do you think of this move from Netflix? Let us know your thoughts in the comments down below!

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SOURCES: Variety, Exstreamist

Film, News, TV Netflix