Amazon has $1 billion in movie theater investments planned.Amazon.com Inc. plans to invest more than $1 billion annually to produce movies for theaters, according to sources.
The world’s largest online store wants to make 12 to 15 movies a year for theaters, said unnamed sources.
Most streaming films haven’t been in theaters.
they’ve been shown on fewer screens and for shorter periods of time than films produced by conventional film studios. By releasing more than one movie per week for home viewers, Netflix Inc. has especially irritated theater chains.
On Wednesday, the world’s largest streaming service released Knives Out’s sequel. But before moving to streaming the following month, it will only stay there for a week. In theaters in 2019, the first movie brought in $312.9 million.
Although Amazon hasn’t made as much money on original films as Netflix, it has been more accommodating to movie theaters. Amazon only puts out a few dozen films annually, many of which are in languages other than English, compared to Netflix’s close to 100 releases.
According to a note published on Wednesday by Bloomberg Intelligence analyst Geetha Ranganathan, Amazon.com’s plans to spend $1 billion to produce 12 to 15 films annually for release in theaters is a vote of confidence in the theatrical model. Given that Warner and Universal have relatively similar budgets, it could “easily boost receipts by 15%–20%.”
Shares of theater operators rose following the news. The biggest chain, AMC Entertainment Holdings Inc., saw a gain of up to 9.2% to $7.99 in New York. A 12% increase to $13.78 was seen in Cinemark Holdings Inc.
Amazon’s $8.5 billion acquisition of MGM, a 98-year-old Hollywood studio that produced Ben-Hur and Legally Blonde, has increased its investment in original movies despite cost-cutting.
Along with the family of producer Albert Broccoli, it releases the Rocky and James Bond franchises. Just one month after Amazon purchased MGM, its two top film executives, Michael DeLuca and Pam Abdy, left the company. Since then, Amazon Studios head Jennifer Salke has been searching for a new executive to oversee the company’s film division.
Salke’s boss, Mike Hopkins, met with candidates like Sean Bailey, a Walt Disney Co. executive, and Emma Watts, a former employee of Fox and Paramount. Instead of reporting to Hopkins, Salke will now be in charge of the job search.
By purchasing films at the Sundance Film Festival and releasing them over a period of months in tens of thousands of theaters—a cycle that mirrored that of a traditional studio—Amazon first caught the attention of the film industry.
The Big Sick and Manchester by the Sea both received Academy Award nominations. Even though the critics loved those films, the box office results were only moderately successful.
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Taking over Amazon’s Hollywood division
Salke went on her own shopping spree at Sundance in 2019. Amazon, however, changed its approach to releases in order to give its streaming service top priority.
The recent Lord of the Rings TV series and other initiatives like The Terminal List, a Chris Pratt-starring project, are the results of founder Jeff Bezos’s efforts to push his Hollywood studio to create and release more commercial content.
Prior to moving on to film, every streaming service, including Netflix and Apple, has spent more money on original TV.
When Amazon releases a new product, theaters want it. In 2019, 33% fewer tickets were sold than in 2018 before the pandemic.
Many of the biggest film studios have started releasing original movies online to boost their streaming services.
Filmmakers, Hollywood vets, and talent agents urge media companies to embrace theaters despite declining ticket sales. They think that even the biggest streaming film cannot compete with a big box office success like Top Gun: Maverick.
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