Netflix is quite literally Hollywood...it has the only studios physically located in Hollywood, releases movies on the big screen, and adheres to all of the guild/union rules with respect to film productions.

It's had its share of horrible remakes, blockbuster crap, and arthouse films.

No studio releases all of its movies to theaters; most studio catalogs have more VOD releases (formerly "direct-to-video") than studio releases. The VOD releases are frequently more profitable on an average basis so long as budgets are strictly adhered to.