By Angela Harmantas
A small-budget movie screening at the Toronto International Film Festival is shaking up the movie business and causing industry executives to sweat. Today on Before the Bell we look at Netflix’s emergence as a power player in Hollywood, and why it’s changing the traditional business model. Also, REITs may seem like a sure-fire way to capitalize on a red-hot real estate sector, but our analyst urges caution for a few reasons – here’s what you need to know today:
It’s not often I get to write about movies in a business blog, but as the Toronto International Film Festival is in full swing, there’s a story emerging in town that could have major implications for the way the movie industry operates. You may not have heard of Beasts of No Nation yet (although if the hype surrounding the film is real, expect that to change in the next few months as Oscar season ramps up), but it’s not the movie itself that is causing studio executives to sweat, it’s the film’s distribution rights. Earlier this year streaming service Netflix acquired the rights to the film and plans to release it on its platform simultaneously as the movie is shown in theatres – that is, if it even gets to theatres. Major chains such as Cineplex Odeon are refusing to show the film in theatres as it bypasses the traditional waiting period between initial release and DVD or streaming platforms, thereby threating their main source of revenue – ticket sales. With Netflix and their competitors such as Amazon Prime making no secret of their desire to secure distribution rights for new releases, even going as far as financing the films themselves, this looks like it could become a major challenge for theatre chains to confront. For more insight into Netflix’s shakeup of the movie business, check out these articles in Canadian Business and Fast Company.
We’ve talked a lot about the housing sector in Canada on SmallCapPower in recent weeks, but today we’re looking at it from a different angle. Real Estate Investment Trusts own and in some cases operate income-generating properties – think offices, apartment buildings, hospitals, hotels and shopping centres. They certainly appear to be a popular way to capitalize upon Canada’s red-hot real estate market of late, but as Gravitas Financial’s Alex Cutulenco notes in today’s top story, investors interested in REITs still need to exercise caution and conduct their due diligence. He gives us a list of 3 commercial and residential REITs that could cool as Canada’s housing market overheats. Of course, that depends on your stance on whether the market is too hot at the moment and headed for a downturn –thoughts?
Can these five stocks thrive despite the anticipated Fed rate hike? With an interest rate announcement pending this Thursday, Wall Street and Bay Street are gearing up for shockwaves no matter what the Fed’s decision may be. However, our analysts believe that these stocks have robust outlooks, hike or no hike, thanks to ample reserves of cash, little or no debt and positive free cash flow. Everyone’s picking winners and losers this week, so what do you think of ours?
Do you have a burning question you’d like answered by an investment expert or analyst? Let me know and I can post the answer here in the blog. Contact me by email at angela@smallcappower.com or on Twitter: @aharmantas.
Interested in previous Before the Bell blogs? 
