As Stock Rises By 25%, Netflix Wants More Money For Originals

By 01/24/2013
As Stock Rises By 25%, Netflix Wants More Money For Originals

David Fincher’s House of Cards and the new season of Arrested Development will both debut on Netflix in the new few months, and they are arguably the two most hotly anticipated upcoming web series set to hit screens in 2013. Still, a report in Variety explains the popular online video platform is hoping to make an even bigger impact later in the year. Netflix is hoping to raise money for more original programming, offering its continued success and rising stock to potential investors as proof of its soundness.

Netflix’s massive production costs made many predict a Q4 2012 loss, but the distribution service actually gained $8 million in income over the last three months of the year, sending its total profit close to a billion at $945 million. The result was a flurry of trading after closing hours on January 23rd, which left Netflix stock at over $130 per share. For comparison, Netflix stock was worth just $58 a few months ago.

As for its originals, Netflix isn’t looking for modest success; it’s looking for huge viewership, particularly with its two big name series. If they are wildly successful, more funds will surely follow. “This is about the opportunity provided by the debt market to get really low cost, long-term capital,” said CFO David Wells. “(It’s) for us to preserve the flexibility, if we see massive success with originals, to expand that program and develop more down the road.” From what we’ve seen far, Netflix’s plan seems like a sound one.

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