My point is that movies are the movie studios' core business. It's what they've specialized in for decades. The article specifically mentions HBO as a key competitor, and HBO is known for incredibly high-quality shows. I have a very hard time believing that Netflix will be able to make anything remotely as good and popular as Hollywood's movies and shows, unless Hollywood collectively does something very stupid to piss off its existing actors, writers and producers.
Netflix are great at distribution, but they need to have something to distribute. There is no use in distributing a product that no one wants. The movie studios' key product isn't distribution, it's the movies themselves. Things are different in the music industry, where many of the labels are simply an intermediary between the musicians and the customers. But the product and distribution are much more connected in the movie industry.