Netflix, Inc. (NASDAQ:NFLX) is winning because it has a “vision,” says Harvey Weinstein, chairman of The Weinstein Company, who is producing Crouching Tiger: The Green Legend. In the starting of this month, it was announced that the Crouching Tiger, Hidden Dragon sequel would be released simultaneously in IMAX theaters and on Netflix.
Weinstein supporting dual release
The announcement caught criticism from the theater owners due to its distribution model, who argued that such a release will result in cannibalizing their business.
Worm Capital July 2020 Performance Update: Up 152% YTD
Worm Capital performance update for the month ended July 31, 2020. Q2 2020 hedge fund letters, conferences and more Long/Short Equity Growth Strategy Net Performance Long-Only Equity Growth Strategy Net Performance
However, Weinstein supported of the dual release model, according to Business Insider. At the Produced By: New York conference Weinstein said that most executives love money and not movies, but Netflix is different as it loves movies.
“They gave us a big canvas to paint on,” Weinstein added, one that included “all the toys and candy.”
On the criticism from exhibitors surrounding the Crouching Tiger’s release model, Weinstein said he was surprised as “Honestly, we thought IMAX had that in hand.” Weinstein said that personally he would like to see the film in IMAX.
Netflix has a big budget
According to a report from Variety, the goal was to offer choice to consumers, but for a company like Weinstein it was also important to secure a $60 million budget for the massive action film, “the kind of picture the indie label rarely gets to make.”
On the other hand, a budget of $60 million is not too large for Netflix under its new spending strategy. Netflix content chief Ted Sarandos stated at the beginning of the year that the company would spend $3 billion on making TV and movies in 2014. Just recently, the company announced that it will fund four exclusive Adam Sandler films.
Netflix holds potential
Netflix lost almost a fifth of its value after posting weak earning reports, but Mark Mahaney at RBC believe the slip in the share price should be seen as an opportunity. The share price tumbled more than 20% after the streaming company posted lower net subscriber additions for the third-quarter. In the quarter, the company added only 980,000 domestic subscribers, which was less than 1.37 million net adds expected by the analysts.
However, Mahaney is confident that the company will reach its target of 50 million subscribers by 2017. The analyst also noted that the competition would be pretty much at the same level in the future, while Netflix has the potential to attract more customers.