Amazon.com Inc. plans to spend more than $1 billion a year to produce movies for theatrical release, according to people familiar with the company’s plans, the largest commitment to theaters by an Internet company.
The world’s largest online retailer aims to make 12 to 15 movies a year that will be released theatrically, said the people, who asked not to be named because the company is still reviewing its strategy. Amazon will release a smaller number of movies in theaters next year and will ramp up its output over time. That number of releases puts it on par with major studios like Paramount Pictures.
Streaming services have eschewed theaters with most of their original movies, or have released titles for less time and on fewer screens than traditional movie studios. Netflix Inc., in particular, has aggravated theater chains by releasing more than one movie a week for home viewers. The streaming giant released a sequel to knives out in theaters Wednesday. However, she’ll be staying there for just a week, before heading to streaming next month. The original film grossed $312.9 million theatrically in 2019.
Amazon has been more open to theaters than Netflix, but has yet to invest as much money in original movies. While Netflix releases close to 100 movies a year, Amazon releases just a couple dozen, many in languages other than English.
“Amazon.com’s plans to invest $1 billion to produce 12 to 15 movies a year for theatrical release is a vote of confidence in the movie model,” Bloomberg Intelligence analyst Geetha wrote in a note Wednesday. ranganathan. It could “easily increase revenue by 15-20% given that Universal and Warner have more or less similar budgets.”
The news lifted shares of theater operators. AMC Entertainment Holdings Inc., the largest chain, rose as much as 9.2% to $7.99 in New York. Cinemark Holdings Inc. advanced as much as 12% to $13.78.
Although Amazon is in a cost reduction modeThe company is increasing its investment in original films following its $8.5 billion acquisition of MGM, a 98-year-old Hollywood studio that released Ben Hur Y Legally Blonde. Its franchises include Rocky and James Bond, which premieres together with the family of producer Albert Broccoli. MGM’s two top movie executives, Michael DeLuca and Pam Abdy, left Amazon just a month after it acquired the company, and Amazon Studios head Jennifer Salke has been looking for an executive to run the movie business.
Salke’s boss, Mike Hopkins, met with candidates including Emma Watts, formerly of Fox and Paramount, and Sean Bailey, an executive at Walt Disney Co. But Salke took control of the job search, which will now report to her. instead of Hopkins.
Amazon first caught the attention of the movie business by acquiring projects at the Sundance Film Festival and releasing them in thousands of theaters over months, a cycle that resembled that of a traditional studio. He earned Academy Award nominations for the big sick Y Manchester by the sea. While those movies loved the critics, they were only modest successes at the box office.
Salke went on a shopping spree at Sundance in 2019 after taking command of Amazon’s Hollywood operations. But Amazon changed its launch strategy to prioritize its streaming service.
Founder Jeff Bezos has also pushed his Hollywood studio to develop and publish more commercial material, leading to the recent The Lord of the rings television series, as well as projects such as the list of terminals, a show starring Chris Pratt. All streaming companies, including Netflix and Apple, have poured more money into original TV before moving on to film.
Theaters will welcome the new Amazon product, whenever it arrives. US ticket sales have fallen more than 33% since 2019, the last full year before the pandemic shut down theaters. Many of the biggest movie studios are part of companies that have started releasing original movies online to boost their streaming services.
Yet despite the drop in ticket sales, filmmakers, Hollywood veterans and talent representatives are pushing for media companies to embrace theaters. Create a big hit in theaters, like Top Gun: Maverickit’s more lucrative than even the biggest streaming movie.
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