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The turning point – how Netflix scares Hollywood

The share of the moving image market leader Netflix has doubled its value since the beginning of the year. Now the provider is preparing to replace Hollywood. The turning point has begun. With Brad Pitt, an A-tier actor has decided for the first time that his movie should premiere on Netflix. Subscribers to the service […]

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The share of the moving image market leader Netflix has doubled its value since the beginning of the year. Now the provider is preparing to replace Hollywood. The turning point has begun. With Brad Pitt, an A-tier actor has decided for the first time that his movie should premiere on Netflix. Subscribers to the service can see “War Machine” in their own four walls before it flickers across the big screen.

Moving the important premier of a movie to a Film-Stream-ing channel is a strong signal. It shows that the service is no longer just competing with television. Rather, the company Netflix, which started with video-on-demand in the 1990s, apparently has the power to shake the Hollywood system.

Relocation of film production

Netflix will still develop enormous potential, head of the Center for Cultural Management at the ZHAW in Zurich. The network, for example, has significantly initiated a change in the industry: that film production is relocating from Los Angeles to New York. “More and more good directors and actors are making films and series on the east coast “In this respect, the success of Netflix is ​​a weakening for Hollywood.”

Even if the old studio system has already lost its validity in recent years – the premiere of the Brad Pitt film is one of the many, small steps that Netflix is ​​taking to become an octopus in the film business. The production of top-class self-series such as “House of Cards” with Oscar winner Kevin Spacey was a milestone.

This also makes Netflix more important as a producer. “War Machine” is financing CEO Reed Hastings with 30 million US dollars. This is the largest sum that Netflix has ever invested in a single project.

Share split is expected

Investors are pleased with this news. Netflix’s course has exploded in the face of these omens. The share has more than doubled its value since the beginning of the year. Rumors about an imminent stock split – in which the papers of each holder will be divided into several smaller amounts – have fueled the price again. On Monday, the rate rose by a good 7 percent to 692 US dollars.

Since then, the paper has given way again and is currently at just under $ 665. The outlook is positive, however: UBS sees the potential for an exchange rate of over 720 US dollars in the foreseeable future due to the global expansion.

The run on the Netflix paper shows: Spotify, the music industry equivalent, fares similarly. Although Apple is launching a relevant competing product with “Apple Music”, the company was able to raise half a billion dollars in sponsorship funds shortly beforehand. The company is now valued at $ 8.2 billion – twice as much as it was in the fall of 2013. The IPO is expected this year.

Apple could get into the business

Some want some of this cake, so the competition for Netflix will grow. Amazon has already jumped on the bandwagon by producing films itself. And even a well-known tech giant could roll back the business as soon as it turns out that the business model has proven itself. Seger says: “Apple could also get involved in due course.”

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