Netflix to raise $1bn to tap surge in Covid-19 lockdown subscribers

Netflix plans to use some of the cash to acquire content and for possible acquisitions, positioning itself as major US studios halt productions and delay film releases due to coronavirus lockdowns.

Netflix plans to raise about $1bn (€922m) in debt to beef up original content, a day after the streaming pioneer doubled its own projections for new customers as stuck-at-home users binged on movies and shows.

Shares in the company fell at one stage after it also forecast a weaker second half of the year when shelter-in-place orders are lifted.

Netflix plans to use some of the cash to acquire content and for possible acquisitions, positioning itself as major US studios halt productions and delay film releases due to coronavirus lockdowns.

Most programming for 2020, and much of 2021, has already been filmed and is being finished remotely in post-production, said chief content officer Ted Sarandos, adding that the company is working on more than 200 such projects.

As streaming grows in the US, the space has become more competitive with the debut of Disney+ and others.

That threat has pushed Netflix, with about 183m global subscribers, to aggressively expand content and look overseas for growth.

“Despite new services on the horizon from HBO and launches of services from Disney and Apple, we expect minimal long-term impact to Netflix subscriber addition and retention,” wrote Piper Sandler analysts in a client note.

Netflix launched several popular original shows in the first quarter, including action film Spenser Confidential, documentary miniseries Tiger King, dating show Love is Blind, and Spanish drama Money Heist.

The current quarter slate includes the Chris Hemsworth-starred action movie Extraction.

- Reuters