Netflix crossed a notable milestone of its lifetime in the form of 100 million subscribers earlier last week. And today, the on-demand video streaming company announced that it is planning to raise a fresh 1 billion euros (ab0ut $1.08 billion) through senior note debt offering. It is not looking to add new investors by liquidating their stockholding pattern any further.
This development follows pursuit to a similar debt fundraising activity, which occurred back in October last year. Much like the last year, the senior notes being offered in this sale will only be available to non-U.S personnel (more specifically — qualified institutional buyers from outside the United States). Talking about the specifics of the debt offering, which are presently undecided, Netflix says,
The interest rate, redemption provisions, maturity date and other terms of the Notes will be determined by negotiations between Netflix and the initial purchasers.
For those mulling over the said decision, the company has decided to adopt the strategy to raise fresh capital and spend it on further increasing the content partnerships and catalogue as a whole. Its current global user base reaches over 100 million — with nearly 40 million is based outside the US. The latter also account for a presence in over 75 percent of households in the United States, while its competitors YouTube and Amazon registered just 53 and 33 percent of homes respectively.
Thus, the streaming giant has decided to append its TV show and movies library with the addition of content, which isn’t available on any other online streaming platform. It is currently signing new content partnerships and plans to use the funds scored through this debt offering for ‘general corporate purposes.’ These can easily range from capital expenditures, investments in content acquisitions and other strategic transactions to other potential acquisitions.
Now, let’s talk about Netflix’s presence and growth in the Indian sub-continent, which lies at a soaring third spot in terms of mobile usage for the video streaming platform. The country is one of the key focus markets for the company, especially in the Asian region. This is also the most prominent market where it is facing extreme competition from American counterpart Amazon Prime Video, as well as homegrown streaming giant Hotstar.
Talking about the same, Netflix CEO Reed Hastings said,
India is hugely important for us in the long term because it’s one of the strongest internet markets and internet TV is the future over the next 10-20 years, given that linear TV will decline in viewing eventually.
Thus, Netflix is looking to stabilize its position and expanding on the content libraries – both international and regional in India. But, since it is becoming difficult to focus on its growth from far away, thus, the video streaming giant has decided to set up a full-fledged office in Mumbai. This will mark its fourth physical set up in Asia, after Tokyo, Singapore, and Taiwan.
Further, it aims to double the number of television series and movie titles globally on its app to around 880 by the year 2018. Netflix has also announced that its service will now be available on Bharti Airtel and Videocon’s DTH platforms. It has entered into a carrier billing agreement with Vodafone India which will enable users to pay for their subscriptions directly to the telco.