Amazon to spend $1 billion on theatrical releases, boosting cinema shares

Cinemas shares bought a lift Wednesday after a report mentioned Amazon plans to spend $1 billion a yr on theatrical movie releases.

The tech firm plans to make between 12 and 15 films for film theaters annually, Bloomberg reported, citing folks conversant in the matter. A smaller variety of movies will likely be produced in 2023 as Amazon builds up its output, the report mentioned.

Cinemark jumped 11% on the information, with IMAX up 7% and AMC up 5%.

Amazon declined to remark.

Amazon has deepened its investments in authentic content material over time by way of its Prime Video streaming unit, in addition to its film and tv studios. The corporate spent $13 billion on content material for its video and music streaming companies final yr, up from $11 billion in 2020, because it seems to stay aggressive within the crowded media panorama. 

Earlier this yr, the e-retailer bolstered its media ambitions when it acquired legendary film maker MGM Studios for $8.45 billion. 

Amazon founder and government chairman Jeff Bezos has made no secret of his want to develop the corporate’s media enterprise, and he has lengthy believed that it could possibly assist drive Prime subscriptions and extra purchases on its core e-commerce website. 

Amazon has launched films in theaters up to now. It premiered the primary two episodes of its Lord of the Rings collection in cinemas for a restricted window, and its 2017 comedy “The Large Sick” was proven in theaters. However the firm has primarily launched its authentic content material immediately on the Prime Video service.

Whereas a $1 billion annual funding for movie improvement is on the decrease finish of what main Hollywood studios spend annually, its a constructive signal for the movie show enterprise, which has struggled within the wake of the pandemic.

Audiences have returned to cinemas, however as a result of the manufacturing pipeline was stalled in 2020 and 2021, fewer films have been launched in cinemas in 2022. Blockbuster movies proceed to drive important, generally document breaking, home field workplace numbers, however with no regular slate of latest content material, the general business stays considerably under prepandemic ranges.

There was about one-third fewer broad releases — movies that debut in additional than 2,000 theaters — and that has meant that the general field workplace is down about one-third as properly in comparison with 2019.

“We definitely applaud content material makers after they resolve to spend on high quality films,” mentioned Jeffrey Kaufman, chief content material officer and senior vp of movie and advertising at Malco Theatres. “However to this point, no streaming firm has dedicated to a sturdy theatrical distribution mannequin, together with Amazon. We’d love if any streamer would help the theatrical area with broad high quality releases.”

Already, 2023 is predicted to be a stronger yr on the home field workplace, as manufacturing ranges returned to regular in 2022, however Amazon’s extra movie commitments provides the business one other confidence increase.