• by Wayne Friedman , June 5, 2018

Following a Barclays Capital analyst report on Monday, which said Netflix’s “aggressiveness” could reshape movie distribution, the big subscription video service hit another stock market record.

On Tuesday, Neflix's stock closed up 1.1% to $365.80 --  a new record. The stock is up 91% year-to-date, and 121% over year-over-year.

Kannan Venkateshwar, media analyst of Barclays Capital, writes: “We believe the economics for companies with global streaming scale like Netflix may be more favorable than theatrical releases, over time.”

Venkateshwar says Netflix is pushing its theatrical film business to focus on a small subset of movies over time -- meaning those big-time summer and holiday franchises, mostly fantasy, sci-fi films.

“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.”

He says troubling economics for theatrical producers will push legacy studios to do things differently, such as releasing movies simultaneously on TV and theatrical.

“Day-and-date movie releases, or films released simultaneously theatrically and across different windows, could, in some cases, become a way for companies such as Disney to drive global growth for its streaming business.”

Venkateshwar says: “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.”

The movie business might transform itself akin to what has happened to pay TV industry: “[It]is likely to be a secular headwind for theatrical distributors over time, akin to cord-cutting on TV.”