The world’s largest online retailer plans to release 12 to 15 films a year to hit theaters, people who requested anonymity said as the company is still sorting out its strategy.
Amazon will release fewer movies in theaters next year and increase production volumes over time. Such a number of releases puts him on a par with such major studios as Paramount Pictures.
Streaming services avoid theaters with most of their original films or release titles in less time and on fewer screens than traditional film studios. Netflix Inc. in particular, this has exacerbated the situation of cinema chains, as they release more than one film per week for home audiences. The streaming giant released the sequel to Knives Out in theaters on Wednesday. However, it will only stay there for one week before heading to streaming next month. The original film grossed $312.9 million at the box office in 2019.
Amazon has been more open to theaters than Netflix, but has yet to invest as much money in original films. While Netflix releases about 100 films a year, Amazon only releases a couple dozen films, many of which are not in English.
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“Amazon.com’s plans to invest $1 billion to produce 12-15 films a year for theaters is a vote of confidence in the theatrical model,” Bloomberg Intelligence analyst Gita Ranganathan wrote on Wednesday. This can “easily increase revenue by 15-20% considering Universal as well as Warner have roughly the same budgets.
The news boosted theater operators’ shares. Shares of the largest network AMC Entertainment Holdings Inc. rose 9.2% to $7.99 in New York. Cinemark Holdings Inc. rose by as much as 12% to $13.78.
Although Amazon is in cost-cutting mode, the company is ramping up its investment in original films after acquiring MGM, the 98-year-old Hollywood studio behind Ben Hur and Legally Blonde, for $8.5 billion. .
His franchises include Rocky and James Bond, which he co-produces with the family of producer Albert Broccoli. Two MGM executives, Michael DeLuca and Pam Abdi, left Amazon just a month after the company acquired the company, and Amazon Studios CEO Jennifer Salke is looking for an executive to lead the movie business.
Salke’s boss, Mike Hopkins, met with candidates including Emma Watts, formerly of Fox and Paramount, and Sean Bailey, chief executive of the Walt Disney Co. But Salke took control of finding a job that would now report to her instead of Hopkins.
Amazon first caught the attention of the film business by acquiring projects at the Sundance Film Festival and releasing them in thousands of theaters for months, a cycle that resembled a traditional studio.
He was nominated for Academy Awards for The Big Sick and Manchester by the Sea. Although critically acclaimed, these films were only modestly successful at the box office.
In 2019, Salke moved into her own shopping at Sundance after leading Amazon’s Hollywood operations. But Amazon has changed its release strategy to prioritize the streaming service.
Founder Jeff Bezos has also pushed his Hollywood studio to develop and release more commercial material, leading to the recent TV series The Lord of the Rings, as well as projects like Terminal List, a show starring Chris Pratt.
All streaming companies, including Netflix and Apple, have invested more money in original TV before moving on to film.
Theaters will welcome a new product from Amazon whenever it arrives. US ticket sales are down more than 33% from 2019, the last full year before theaters closed due to the pandemic.
Many of the biggest film studios are part of companies that have started releasing original movies online to improve their streaming services.
Yet despite the decline in ticket sales, filmmakers, Hollywood veterans and talent representatives are pushing for media companies to embrace theaters. They believe that a big hit in theaters like Top Gun: Maverick is more profitable than even the most popular streaming movie.