Fresh off quarterly financials that saw subscriber growth go through the roof, Netflix is sticking its hand out to the market looking for $1 billion in funding for content creation in the United States and Europe.
Perhaps lost in the staggering 15.77 million Q1 subscriber additions is the reality Netflix has nearly $15 billion in debt — a line item management doesn’t mind increasing. With the lack of free cash flow an ongoing issue for Netflix critics, CEO Reed Hastings was quick to point out in the April 21 shareholder letter that due to shutdowns in production, cash flow had stabilized.
Net cash used in Q1 operating activities was +$260 million compared to -$380 million in the prior year period. Free cash flow totaled +$162 million compared, with -$460 million in the year ago quarter.
With Netflix productions currently paused, management is now expecting year-end free cash flow of -$1 billion compared with previous expectation from -$2.5 billion and -$3.3 billion actual in 2019).
“We have more than 12 months of liquidity and substantial financial flexibility,” Hastings and CFO Spenser Neumann wrote in the shareholder letter. “Our financing strategy remains unchanged — our current plan is to continue to use debt to finance our investment needs.”
With a high-profile subscription streaming video platform HBO Max launching next month, and many of its business segments at WarnerMedia Entertainment idle due to the coronavirus pandemic, AT&T April 7 announced a $5.5 billion term-loan agreement with 12 banks to provide additional financial “flexibility” to what it characterized as an “already strong cash position.” The loans are pre-payable without penalty.
The telecom said it had about $12 billion in cash on hand at the end of 2019. It also ended last year with about $170 billion in debt — much of it accrued from the $85 billion acquisition of Time Warner, whose assets include Warner Bros., HBO and Turner.
In a regulatory filing, AT&T said the “strength and relevance” of its core subscription businesses (telecom and pay-TV) would provide enough cash from operations to support network investments, dividend payments and debt retirement, as well as the ability to invest in business opportunities that arise as the economy recovers.
The telecom said it expects to generate $2 billion from the expected closing later in 2020 from the previously announced divestiture of television channels in Bulgaria, Czech Republic, Romania, Slovakia and Slovenia., as well as additional proceeds from a number of other real estate and cell tower sales.
The company expects to close the sale of its Puerto Rico and U.S. Virgin Islands operations later this year. AT&T also has a $15 billion revolver in place but said it sees need or plans to use it in 2020.
While it suspended a stock repurchase program, AT&T said it “looks forward” to continuing to pay a quarterly dividend to shareholders as it has for 36 years. On March 27, the board of directors declared a dividend payable on May 1, to stockholders of record of its common and preferred shares at the close of business on April 9.
The telecom also announced it hold its 2020 annual meeting on April 24 (10 a.m. ET) via webcast only.
MobiTV, a platform offering pay-TV operators over-the-top video distribution across myriad platforms, July 1 announced it has closed more than $50 million in funding from three investment funds.
Based in Emeryville, Calif., MobiTV enables third-party pay-TV operators to offer subscribers on-demand programming, live TV, catch-up TV, network DVR and content recommendations without the need of a set-top box.
Investors include Oak Investment Partners, Ally Financial, and Cedar Grove Partners. The funding will be used to accelerate the growth of MobiTV’s international footprint.
“We believe in MobiTV’s superior consumer experience and know that being the only true commercially deployed solution in North America has differentiated their positioning in the marketplace,” Bandel Carano, managing partner, Oak Investment Partners, said in a statement.
MobiTV’s “multi-tenant solution” can be deployed through either a managed service or in-network offering, enabling it to address operators of all sizes, in a cost-effective manner.
Third-party clients include Citizens Fiber, Windstream and EPB with access to more than 350 networks, including A+E Networks, AMC Networks, Crown Media Family Networks, C-SPAN Networks, Disney and ESPN Media Networks, Showtime and Viacom, among others.
“We’re equally proud to have a nod from the National Cable Television Cooperative, as they selected MobiTV as a premiere partner for app-based pay-TV video solutions,” said MobiTV chairman/CEO Charlie Nooney. “We continue to demonstrate our ground-breaking approach to addressing operator challenges as they upgrade their pay-TV offering in an increasingly competitive marketplace.”
Netflix June 11 at the 2019 Banff World Media Festival announced a partnership aimed at assisting indigenous filmmakers in Canada.
The SVOD pioneer is working with imagineNative, The Indigenous Screen Office (ISO) and Wapikoni Mobile on programs ranging from screenwriting to apprenticeships, joining 11 existing programs Netflix has funded to guide content creators from underrepresented communities.
“Indigenous communities in Canada are rich with unique stories,” Stéphane Cardin, director of public policy, Netflix Canada, said in a statement. “Netflix is proud to help launch these three programs, which will reach indigenous communities across the country.”
Canada was Netflix’s first foreign expansion in 2010 and now accounts for more than 7 million subscribers.
Over the next three-and-a-half years, imagineNative will undertake or expand activities aimed at indigenous screenwriters, directors and producers through its institute department.
“This funding is a significant investment in opportunities for indigenous directors, producers, and screenwriters in Canada, and marks one of the largest sponsorships in [our] history,” said Jason Ryle, executive director of imagineNative.
The ISO-Netflix Production Mentorship and Apprenticeship Program will provide second phase support for projects that may have received assistance through programs offered by imagineNative, Hot Docs, Banff World Media Festival or Whistler Film Festival, among others.
The program will include two streams: Key Creative Apprenticeships and Cultural Mentorships for directors, producers, screenwriters and showrunners.
“ISO spent the last year in consultations with Indigenous creators and this fund responds to their expressed need for new funding opportunities that will advance work and career opportunities, as well as allow them to follow protocols and practices that are central to Indigenous ways of working,” said Jesse Wente, director of the Indigenous Screen Office.
With the Netflix partnership, Wapikoni will be able to coordinate emerging filmmakers, organize opportunities and structure a program of both continuing education and professional coaching.
Focuses include mediation, dialogue, awareness, education and building bridges between nations, peoples and generations.
“The support from Netflix will allow us to continue to foster narrative sovereignty and cinematographic excellence,” said Joannette, from the Pessamit First Nation of Quebec, and executive director at Wapikoni.
Netflix’s support of these programs comes from its fund to develop the next generation of Canadian creators and talent, focused on underrepresented communities in the screen industry.