MUMBAI: Following a Barclays Capital analyst report, which said Netflix’s “aggressiveness” could reshape movie distribution, the giant subscription video service soared to another stock market record. On 5 June 2018, Neflix’s stock closed up 1.1 per cent to $365.80– a new record. The stock is up 91 per cent year-to-date, and 121 per cent year-over-year.
Barclays Capital media analyst Kannan Venkateshwar wrote, “We believe the economics for companies with global streaming scale like Netflix may be more favourable than theatrical releases, over time.”
He added that Netflix is scaling up its theatrical film business to focus on a small subset of movies over time.
“We believe Netflix’s increased aggressiveness around original movies and its emphasis on nontheatrical releases, if sustained, is likely to make this skew worse and could reshape the nature of movies and its economics in the coming years.”
Venkateshwar feels that the troubling economics for theatrical producers will push legacy studios to do things differently like as releasing movies simultaneously on TV and theatrical.
“Day-and-date movie releases or films released simultaneously theatrically and across different windows, could become a way for companies such as Disney to drive global growth for its streaming business,” he added.
“Movie distribution could, in general, follow much more of a barbell distribution — with the big movies needing to get bigger to justify the cost of theatrical releases while small movies go direct to consumers through streaming services.” said Venkateshwar.
Given the frequency of digital disruptions, there is a real chance that the movie business could witnessed a transformation much like the pay TV industry.
