Netflix is borrowing another $1 billion for the next stage of the TV and movies arms race

Fans of “Stranger Things” will be happy to hear Netflix is raising more than $1 billion via debt offering to make more seasons of the hit series — and lots of other original content — as part of its strategy to drive subscriber growth. The company announced plans of the new debt offering on Monday.

Netflix is already more than $3 billion in debt, but this hasn’t really worried investors: The movie service’s stock is currently trading at about $144 a share, a 54 percent improvement over last year. And the reason that Wall Street is cool (for now) with Netflix taking on such a substantial debt load is that it believes in the spend-heavy plan of Netflix CEO Reed Hastings.

The basic strategy is pretty simple: As more and more people cut the cord and ditch their cable TV subscriptions, they turn to subscription services like Netflix and Hulu. In the U.S., Netflix subscriber growth has been slowing, but the company continues to add customers abroad. Between 2011 and the beginning of 2016, international Netflix subscriptions have grown from just under a million to about 45 million, while the U.S. subscriber count has risen from 20.5 million to 49 million in that same period.

Maintaining that growth internationally is key, because the company’s stock performance pretty much rides on Netflix’s ability to sustain that growth. Hastings has long said that original content like “Stranger Things” or “Orange Is the New Black” are critical to keeping people interested in buying a Netflix subscription.

Hastings is using a pretty straightforward Silicon Valley blueprint, which is to lose to money on growing your customer base until you reach a scale large enough to put your business in the black. Amazon basically wrote the book on this, and tech darlings like Airbnb and Uber have tried to follow it to a T.

The trouble for Netflix is that making TV shows and movies, and paying for streaming rights on the stuff that Netflix didn’t make, is expensive. And it’s made even more expensive by the fact that deep-pocketed competitors like Apple, Amazon, and now Facebook are entering the scene, which increases the cost of production and puts pressure on Netflix to keep its users’ from watching stuff on other services. The escalating competition means that there were 455 scripted TV shows that aired in 2016, up from 266 shows in 2011. This is the “peak TV” thing that you might have heard about.

An example of the costs involved: Netflix reportedly paid between $70 million and $85 million per season for the show “Bloodline,” which received lukewarm reactions from critics and will end its three-season run later this year.

Meanwhile, Apple, Amazon, Facebook, and other relatively recent entrants are collectively sitting on hundreds of billions of dollars in cash reserves that they could eventually tap to develop content to further challenge Netflix. And their incentive to develop high-quality TV and movies is that it can bring consumers into more lucrative long-term subscription revenue services like iCloud or Amazon Prime, which in turn can help offset the cost of making the content in the first place. All of this, of course, is in addition to existing TV networks and movie studios, who are beginning to prepare for life after the cable bundle by offering their own standalone streaming services like HBO Now or CBS All Access.

The point is: Netflix has lots of rivals with lots of money and proven track records of making critically adored TV shows and movies to which people are reliably drawn. Can Netflix, the pioneer of on-demand movie streaming, find a way to borrow and spend its way ahead of the competition?