Netflix Looks to Raise $400 Million in Cash

Netflix Inc. said it agreed to raise about $400 million in cash from selling stock and bonds that can be converted into stock, a move seen by analysts as a sign that efforts to acquire video content are proving expensive.
The DVD-rental and online-video company also expects to be unprofitable for 2012, according to the regulatory filing for the fund-raising. The company added that revenues would be flat until its subscriber base rises, but said it couldn't be certain whether such growth would happen.
The announcements come after a months-long rough spell for Netflix. Customers and investors howled after it raised prices on a popular subscription plan by 60% in July, and when it announced in September a since-aborted plan to separate its DVD-rental-by-mail service into a separate business called Qwikster.
The Los Gatos, Calif., company has said it lost 800,000 subscribers in this year's third quarter, while its shares have fallen 74% since the price hike was announced on July 12.

Netflix spokesman Steve Swasey said the company doesn't have a pressing need for more cash, "but it's always nice to have more money than you need." He said the company has no immediate plans to use the funds. He added that subscriber cancellations have continued to decline, meaning that Netflix could soon see its subscriber base grow.

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Netflix 'got overconfident' this year, CEO Reed Hastings says

Netflix Chief Executive Reed Hastings, confirming what his critics have said for months, conceded his company "got overconfident" this year and moved too fast to get its customers to stop ordering DVDs in favor of online streaming.
He also said his company sometimes pays too much for its content.
"Our big obsession for the year was let's not live and die with the DVD," Hastings said Tuesday in an interview at the UBS Global Media and Communications Conference in New York.
Earlier this year, Netflix introduced a new pricing scheme and did away with its $9.99 plan that let users watch an unlimited number of movies online and rent one DVD at a time. Now, subscribers who want that combination will have to pay $15.98 a month — $7.99 for Netflix Instant streaming and $7.99 to receive discs in the mail.
That led more than 800,000 subscribers to cancel the service and caused a multibillion-dollar drop in Netflix's market value.
"It turned out to be a little too fast," Hastings said, adding that Netflix took an image beating similar to the one that Bank of America got for trying to charge monthly fees for use of its debit card. Ultimately, he said, this will be forgotten in a few years when streaming content becomes the primary way people view content.
"Streaming is the future," he said.

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