Amazon plans to invest more than a billion dollars annually to produce movies for theaters
In order to develop movies for theaters, Amazon intends to invest more than a billion dollars annually, according to a report by Bloomberg News. If accurate, it would be an online company’s largest-ever commitment to movie theaters. The online shopping titan also intends to release 12 to 15 films per year, according to the article. AMC and Cinemark stock prices are reportedly at session highs. The highest pop-up is received by Cinemark, at about 6.5%.
The massive internet retailer, which earlier this year paid $8.45 billion to acquire MGM Studios, will probably make 12 to 15 films a year for theaters. According to the article, the studio would release fewer movies in theaters in 2023 and gradually increase that number. Amazon already has studios for film and television as well as its Prime Video streaming service. According to reports, the company will invest $11 billion in content for its video and music streaming services in 2020 and $13 billion in 2021.
With the broadcast of the first two episodes of its Lord of the Rings television series, the corporation had previously restricted the release of its films in theaters. A movie commitment from Amazon for theaters is anticipated to support the film sector, which is trying to advance in the wake of the COVID epidemic problems. Compared to Netflix, Amazon has been more accommodating to movie theaters, but it hasn’t yet made as many original film investments. Just a few dozen movies are released by Amazon each year, many of them in languages other than English, compared to close to 100 by Netflix.
According to a note published on Wednesday by Bloomberg Intelligence analyst Geetha Ranganathan, “Amazon.com’s plans to invest $1 billion to develop 12 to 15 movies a year for release in theaters is a vote of confidence in the theatrical business.” Given that Universal and Warner have relatively comparable budgets, it might “easily improve receipts by 15%–20%.”
Shares of theater owners increased on the news. The largest chain, AMC Entertainment Holdings Inc., increased as much as 9.2% to $7.99 in New York. Cinemark Holdings Inc. increased by up to 12% to $13.78. Amazon is increasing its investment in original films while also cutting costs. This is because the business recently paid $8.5 billion to acquire MGM, a 98-year-old Hollywood studio that produced Ben-Hur and Legally Blonde. Its properties, which it releases in cooperation with the Albert Broccoli family, the family of producer Albert Broccoli, include Rocky and James Bond.
Just one month after Amazon bought the company, MGM’s two senior film executives, Michael DeLuca and Pam Abdy, left, and Amazon Studios head Jennifer Salke has been searching for an executive to oversee the film division. Mike Hopkins, Salke’s employer, spoke with potential hires like Sean Bailey, a Walt Disney Co. executive, and Emma Watts, a former employee of Fox and Paramount. Salke, rather than Hopkins, will now be in charge of the employment search as it has been taken over by Salke.
Amazon first caught the attention of the film industry by acquiring films at the Sundance Film Festival and releasing them in hundreds of theaters for months, a cycle resembling that of a traditional studio. The films “Manchester by the Sea” and “The Big Sick” received Academy Award nominations. Even though the critics loved such films, they only had minor box office success. After taking over Amazon’s Hollywood operations in 2019, Salke went on her own shopping spree at Sundance. Amazon, though, changed its release plan to put more emphasis on its streaming service.
Jeff Bezos, the company’s founder, has also pushed his Hollywood studio to produce and release more mainstream content, which has resulted in the recent The Lord of the Rings TV series as well as initiatives like The Terminal List, a Chris Pratt-starring project. Before moving on to movies, all of the streaming services, including Netflix and Apple, put more money into original TV.
Theaters will be happy to receive the new Amazon offering whenever it appears. In comparison to 2019, the previous full year before the epidemic closed cinemas, US ticket sales are down more than 33%. Numerous of the largest film studios are associated with businesses that have begun streaming original films online to promote their streaming services. Filmmakers, Hollywood veterans, and talent agents are all urging media corporations to support theaters despite dwindling ticket sales. They think a big box office success, like Top Gun: Maverick is more profitable than even the most popular streaming film.