In January of 2013, Netflix Chief Content Officer Ted Sarandos astutely laid Netflix’s content strategy on the table for all to see. “The goal is to become HBO faster than HBO can become us,” Sarandos said. He also added that Netflix, in stark opposition to networks that can’t help but micromanage every single aspect of the production process, would shy away from giving notes and would give content creators full-season commitments.
“The idea that they wouldn’t just pull the plug midway was totally thrilling,” Orange Is the New Black creator Jenji Kohan said at the time. “It’s similar to a pay-cable model but even more liberating. This is the future.”
Sarandos’ statement about wanting to become HBO is all the more remarkable given that it was made well before Netflix originals became something of a mainstream institution. In fact, Sarandos’ comment was made well before House of Cards helped put Netflix original programming on the map.
In the years that followed, Netflix threw every spare cent it had at developing original content. And with the streaming giant exhibiting a laser-like focus on introducing fresh content, the company hasn’t shied away from raising debt to help fuel its ambitious content plans. Last year, for instance, Netflix indicated its plan to raise $1.5 billion to help with its spending efforts.
One year later — to the day, in fact — Netflix issued a short statement signaling its intention to raise another $2 billion via a debt offering as to help fund its rising content costs.
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.
While some investors might be wary of Netflix continually turning to debt, the approach has only served to increase the company’s subscriber base. During the recent March quarter, for instance, Netflix disclosed that it added 9.6 million new subscribers across the globe. All told, Netflix has nearly 150 million subscribers in total.