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Netflix To Raise $2 Billion In Debt To Fund More Original Content (techcrunch.com)
According to a press release posted today, Netflix is planning to raise $2 billion to help fund new content, including "content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions." TechCrunch reports: The funds will be raised in the form of senior unsecured notes, denominated in U.S. dollars and euros, it said. This debt offering is the sixth time in under four years that Netflix is raising $1 billion or more through bonds, noted Variety, which was among the first to report the news. As of September 30, Netflix's long-term debt had reached $8.34 billion, up 71% from $4.89 billion in the year ago quarter, it said during its last earnings, Variety's report also noted. Netflix recently explained during its Q3 2018 earnings that it needs to continue to invest in original programming in order to remain competitive. "Content companies such as WarnerMedia and Disney/Fox are moving to self-distribute their own content; tech firms like Apple, Amazon and others are investing in premium content to enhance their distribution platforms," the letter also stated. "Amid these massive competitors on both sides, plus traditional media firms, our job is to make Netflix stand out so that when consumers have free time, they choose to spend it with our service," it had said.
ELI5: Why is their long term debt so high? And isn't that a bad thing?
What are their gross and net profits?
Are they gonna bring back quantum leap?
I'm much happier to watch 30 episodes of "Narcos" than two hours of "Hot Tub Time Machine 2."
Forever
or
Terminator: The Sarah Conner Chronicles
I see they're doing the new season of Lucifer...
I'd also like a sequel to Bright
Just say no to more movies from Adam Sandler though.
I'm much happier to watch 30 episodes of "Narcos" than two hours of "Hot Tub Time Machine 2."
Indeed. The original content is the only thing that makes Netflix worthwhile. Everything else I can watch for free on Amazon Prime.
Nextflix has done everything in their power to go out of business. They devised a bogus rating system. They are doing away with reviews altogether. They put movies in categories where they don't belong. There are fewer movies, now. There are hardly any cult moves, hardly any classics. They've alienated studios by creating their own content.
What more can they do and still keep the lights on?
https://www.youtube.com/c/BrendaEM
Their content is great but their business model is beginning to look something like a Ponzi scheme. They have to borrow more and more in order to make more new content to both attract new subscribers and maintain their existing ones. However, at some point, they will no longer be able to increase their subscription base fast enough to cover their ever-increasing debt at which point things are going to get very bad very fast as they will haemorrhage subscribers like crazy.
They really need to find a way to pay for the new content from our subscriptions. I would much rather have a lower rate of quality shows over the next 30 years than a huge glut of new material for a few years followed by nothing because their business model has imploded.
I can see it working but it's a big gamble. In a nutshell there are a few categories of funds needed by a business: startup costs (building, enhancements, equipment, etc), fixed costs (your monthly bills including payroll, utilities, service contracts, etc.), and variable costs (depends on the interest, but here it would be the costs to make a film or series - the more films/series, the more it costs). The revenue then goes against these expenses, and there's a break even point where you make X number of widgets and take in enough revenue (from sales, licensing, etc.) to cover the costs.
You would think that Netflix has saturated the market by now, so how does throwing more money at content generate more revenue? Netflix has obviously done some thinking.
More original content would mean less licensing films and TV shows from other companies. And they need a bootstrap to produce enough to begin to be free of other studios and distributors. But then where do we go for all the shows that brought us to Netflix? Maybe it's Plan B.
br/> Original content is still key, but perhaps Netflix knows about other markets, like PPV. I don't have any idea how much people pay for films that were recently in theaters and are now in PPV. It could be that Netflix wants to do more films that are either screened broadly or maybe limited run and then charge a few more bucks to watch them.
Whatever they do it's a lot of money and a big risk. The markets are not looking favorably at tech right now, either. I'd be cautious.
My user name was a mistake. Input wasn't restricted, my bad.
I'm much happier to watch 30 episodes of "Narcos" than two hours of "Hot Tub Time Machine 2."
Indeed. The original content is the only thing that makes Netflix worthwhile. Everything else I can watch for free on Amazon Prime.
Apart from a few of their original content shows that either get cancelled half way through for some mysterious reason or are onlyupdated at a glacial pace, Amazon Prime is a huge pile of garbage. This streaming industry fragmentation is not helping anybody, I'm not signing up for, and paying a subscription to: WarnerMedia, Disney/Fox, Apple, Google, Hulu, HBO, YouTube, half a dozen local TV channels, etc. The more this market fragments into tons of separate players who all expect you to shell out a $20, 30, 50 subscription fee for access to their streaming gateway that gets you one new original content show and a handful of movies every couple of months the more likely I am to sign up to the one that has the most interesting stuff (in my case scifi) and pirate the rest of these bozos. Mind you, I might actually subscribe to YouTube if It meant finally getting rid of the damn commercials which should concern the other streaming services if users feel they actually get more value out of watching other users unbox stuff, making their cats do tricks or show you how to paint strip antique furniture than they do signing up to the Disney/Fox streaming gateway and watching their over hyped MPAA censored movies and shows.
Not everything, Bill. For example, the Marvel picture, BLACK PANTHER is free on Netflix, but you'll have to pay above and beyond your Amazon Prime membership to watch it there. There are actually lots of examples of non-original programming on Netflix that you'd have to pay for on Amazon or isn't available there at all.
You are welcome on my lawn.
At this point, Netflix should seek out media company acquisitions to bring some established IPs in-house. With Disney and Comcast gobbling up everything in sight, there may not be a lot of low-hanging fruit left, but they could try and pick up a smaller movie & TV studio like Paramount or Dreamworks so that they can establish some exclusivity around big IPs. They have some decent self-made programming, particularly their comedy specials, but it feels a lot like a moving conveyor where nothing sticks or is that special.
they need a back catalog to keep subs. As everyone and their dog jumps into the streaming services market Netflix needs their own content.
As for, why debt, the answer is taxes. They'll write it off as a business expense.
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but they do need content, not to get new subscribers but to keep the old ones. You need a series of shows you can either go back to or discover. It's not even that big a deal if they're not finished. My kid watched a ton of cheap, unfinished shows on DVD back in the day when she was laid up sick. But the point is to have enough content that folks want to keep the subscription.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
All this competition between subscription services means that a lot of great content that people want to see gets made. That's great for us but unsustainable as we can see from the amount of debt they're racking up. It looks like they're all going for market dominance or broke. This isn't going to last & we'll soon be going back to reality TV, game shows, & re-runs.
However, all these competing services mean that the good TV & movies that we might want to see are fragmented across several providers & also vary from country to country, e.g. Canada only gets a fraction of Netflix's catalogue, because of licensing restrictions.
I say our best bet under these circumstances is a VPN & piracy. Enjoy it all while it's good!
Debate is a form of harassment. Do not question my truth.
I guess Netflix shouldn't have burned piles of cash with four Adam Sandler movies that were worse than garbage.
“Common sense is not so common.” — Voltaire
Yeah, they should just force content owners to license to them... Somehow...
It's not Netflix's fault that every content studio under the sun tanks their licensing in order to give their own streaming operation a go. It does suck for us though - no way I'm subscribing to that useability and payment nightmare.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
and starts being the cable companies they hated so much.
That's what I want to see next. Where is it ?
No seriously. I struggle 30 minutes every time I put netflix on to find something that's not absolute shite or mediocre at best. Every possible title I put in IMDB the ratings are between 4.8 to 5.8, and sometimes when I go for it... I find the score to be more or less precise. Netflix content is mediocre, with couple of things that stand out but not so much. People talk about some things for a month, and then after 5 months nobody even remembers it existed anymore.
Netflix is McDonalds of the entertainment industry... the only thing that's 'saving it' is convenience for "older" generations with kids, and the fact that new generations that are used to new superhero movies every month have an attention span of a gold fish and would never even be able to watch anything other than emotionally charged superficial drama, over the top action or stupid CGI that creeped in every genre of movies and tv shows. Even freaking Comedies have CGI for god sake!
The only thing that's good on netflix is the "Classic" section, and other movies that they have right to stream that are not theirs.
Agreed. Alas, I stare at my Netflix directory and it is screen after screen of utter garbage. Poorly written, shoddy cinematography, and just awful stories. My wife always wonders if they have any humans reviewing the concepts before green-lighting them. Sure, once in a great while something good sneaks through (like Narcos), but 9 time out of 10 (or 98 times out of 100 lately) it is utter crap.
Suppose you were an idiot and suppose you were a member of Congress
You can cancel at any moment though. So basically you can cycle trough all the streaming services as they publish new content. But yeah the fragmentation is taking us back to the TV era.
sudo rm -r -f --no-preserve-root /
Complain all you want about Amazon, the fact is that it's free with a Prime subscription in my mind makes it slightly better than Netflix. My old Apple TV didn't get the Prime Video app until about a year or so ago, and before that I had to either use my clunky Blueray player to watch it or stream it via my phone. Now that it's easy to watch on my AppleTV, I find myself watching Prime as much or more then Netflix. Netflix original content is really dodgy -- there seems to be no consistent pattern to shows badged as Originals, they can suck no matter who the original producer was. Netflix itself has diluted the "Original" label by overuse and not carefully assigning it only to the best content, probably as a means of further masking how poor their content library has become. I'm not at all convinced Netflix has a real grasp on producing good content, they seem hit or miss and prone to cranking out a fair amount of low-grade genre content for every original that's got any kind of cast and budget. In this regard, Amazon seems slightly better. Their originals seem to have slightly more budget, on average better casts, with a lower amount of B-grade genre content. I do agree that the splintering of the streaming market and the desire of content owners to want to hold back for their own service stinks, but I think it will also ultimately fail. Only Disney, HBO and ESPN seem capable of pulling it off long term.
Long time Netflix subscriber here.
I started with them around 2002, when it was optical media only.
It was great to not have to go to the movie rental places anymore and just choose films online.
And as the years went by their catalog got better, right up to and during their initial venture into streaming.
Holy fuck those were the days.
A halcyon era of choice, where they had an amazing catalog of classics, b films, foreign films, all the new stuff as well as all kinds of great stuff to stream.
Then it started to slowly morph in on itself.
The catalog shrank and the original programming took over.
We all know the reasons for this: GREED
So I'm still a NF subscriber, and maybe 2-3 times a week I will watch it for an hour or two.
I still get the Blu-Rays for things I can't stream(better quality anyway).
But here is the interesting thing that has happened. Since NF has devolved and all the other greedy fucks have gotten into the game creating an ultra-balkanized media landscape, I have grown tired of the whole thing. Tired of the all the different services, tired of the menus, tired of the weak original programming, tired of the hassle of trying to find something cool to watch.
So the end result is that I watch less "tv". I "do" more now.
Because of the rat race that this has turned into, I find myself just doing things besides watching.
We play the game with the bravery of being out of range
And how much are you willing to pay? That's the point. Content costs money. That's why people's cable bill exploded.
People started cutting the cord and smugly proclaimed they'll "Watch Netflix Insead" - all the while ignore the fact that content costs money and it would be a matter of time before content cost would hit Netflix.
Well boys and girls, it just did. "Netflix's long-term debt had reached $8.34 billion, up 71% from $4.89 billion in the year ago quarter..." is a huge whopping increase. Investors are not going to like it and your Netflix cost just went up.
What you going to cut next....
It's not free. You're paying for it. I love people who think, hey it's free. It's part of the Prime subscription and a driver of cost increases.
Netflix knows what is popular. They have years of aggregated data showing what people watch and re-watch. Any shows they produce should be a reflection of that. I really hope that this will produce more good series than the current ten fold recycled garbage available on network based tv.
You can cancel at any moment though.
For now. I can imagine seeing Disney requiring a year long contract for their service and then everyone else following in because it's obviously an easy money grab. But who knows, maybe it turns into an interesting bit of ad wars between services.
"These guys want you to pay for a year but what's the point when you've binged your shows in two weekends?"
"Those guys don't have enough content you want to watch so they don't care if you stick around. We always have stuff year round."
The problem with Netflix is the licensing mess. Last time I bothered to keep a subscription they really didn't have that much stuff.
I know I'm not really a typical Slashdotter (I have kids and a fairly busy life outside of the home) - The notion of sitting at home watching six hours of TV is foreign to me. Nevertheless, whenever someone says Netflix "doesn't really have that much stuff" it blows my mind. To me, the library of "stuff" on Netflix is HUGE. The notion that I wouldn't be able to find something to watch is mind-blowing (and that's just little old Canadian Netflix).
I'd pay closer to cable prices for netflix, especially if they had all the content. The reason I pay for netflix is no commercials. It's also why I pay for comcast instead of AT&T. Both claim you can't skip commercials at the beginning of their on-demand shows, but comcast let's you, at&t blocks skipping entirely.
Cheap storage VM.
You can cancel at any moment though.
For now. I can imagine seeing Disney requiring a year long contract for their service and then everyone else following in because it's obviously an easy money grab. But who knows, maybe it turns into an interesting bit of ad wars between services.
"These guys want you to pay for a year but what's the point when you've binged your shows in two weekends?"
"Those guys don't have enough content you want to watch so they don't care if you stick around. We always have stuff year round."
Or only a rotating selection will be available to subscribers so you cannot view the whole series at any given time. Didn't one of the subscription services already do this with new episodes?