Netflix has released its annual report, announcing that it is expecting a substantial increase in its investment in the production of original content in 2014. However, Netflix also assured that content expenditure would continue to represent “less than 10% of our overall global content expense.”
Overall free cash flow for 2013 was negative US$16.3 million – $128.7 million lower than the company’s net income – with an excess of net income over free cash flow increasing year-on-year thanks to higher content investments.
The streaming company also announced its plans to continue to grow its services internationally with a “substantial European expansion in 2014.” Netflix had already outlined its intention for a strong European expansion in its Q4 investment announcement in January 2014.
“We expect to significantly increase our investments in international expansion, including substantial expansion in Europe in 2014, and in original content. As a result, and to take advantage of the current favourable interest rate environment, we plan to obtain approximately $400 million in long term debt in the first quarter of 2014. Our ability to obtain this, or any additional financing that we may choose to or need to obtain, will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing. We may not be able to obtain such financing on terms acceptable to us or at all. If we raise additional funds through the issuance of equity or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience dilution,” Netflix stated in its annual report filing.
In Q4, Netflix’s international subscriber base expanded by 1.7 million members to 10.93 million, slightly more than originally forecast, and can count a total of 33.4 million domestic members.
DTG Staff | 04.02.2014