A few years ago, Netflix came to the astute realization that it needed to amass a large library of original content. The brilliance of Netflix’s decision here was two-fold. For starters, original content helps Netflix bring more subscribers into the fold. Second, a vast library of original content helps lessen the company’s reliance upon third-parties who — thanks to the growing influence Netflix wields — are understandably wary of the threat Netflix poses.
Consequently, Netflix has been spending insane amounts of money on developing and acquiring original content, not to mention licensing content from third-parties. In 2017 alone, Netflix spent approximately $7 billion on content. And just a few months ago, Netflix signaled that it may spend as much as $8 billion on content by the time 2018 draws to a close.
With Netflix easily outspending most other media entities on the planet when it comes to content-based spending, the streaming-giant is now looking to raise some debt to help with its spending efforts.
The company’s press release reads in part:
Netflix intends to use the net proceeds from this offering for general corporate purposes, which may include content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.
It of course stands to reason that Netflix will use the bulk of any cash raised to fund its ambitious content goals. Notably, this isn’t the first time Netflix has used debt to raise capital quickly. Over the past 18 months alone, the company has raised approximately $3.5 billion via other debt offerings.
