Apr 16, 2019

Netflix changes the way TV production is paid for

Now companies such as Netflix are reshaping how TV production is financed. Regulatory filings show that over the next five years Netflix will drip-feed a total of $19.3bn to producers for new shows and to license TV that has already been made. Netflix declined to comment, but a person close to the company said: "Netflix pays market, and often top of market, to work with the best producers. This is a seller's market for them with more competition than ever before." For lenders to production companies, a central concern is the creditworthiness of Netflix and the other streaming businesses that are buying all this content. Loans for shows produced for Netflix have interest rates of 5 to 6 per cent, bankers said, only a nudge more than Netflix's corporate bonds, adjusted for relative maturities.

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