According to those acquainted with the situation, the tech giant intends to annually produce 12 to 15 films for theatres. As Amazon increases its output, fewer movies will be made in 2023, according to the analysis.
Stocks in movie theatres rose on Wednesday following news that Amazon intends to spend $1 billion annually on theatrical releases. Cinemark jumped 11% on the news, with IMAX up 7% and AMC up 5%.
Amazon chose not to respond
Through its Prime Video streaming service, as well as its film and television studios, Amazon has increased its investments in original content throughout the years. In order to stay competitive in the crowded media industry, the business spent $13 billion on content for its video and music streaming services last year, up from $11 billion in 2020. The e-retailer strengthened its media aspirations earlier this year when it paid $8.45 billion to acquire the storied film studio MGM Studios.
Jeff Bezos, the founder and executive chairman of Amazon, has long felt that the company’s media division may help increase the number of Prime subscriptions and other transactions made on its primary e-commerce website.
Amazon has previously distributed films in theatres. For a brief period, it debuted the first two episodes of its Lord of the Rings series in theatres and also showed the 2017 comedy “The Big Sick” as well. However, the company has mostly released its original content on the Prime Video platform.
A $1 billion investment in film development year may be on the lower end of what major Hollywood studios spend annually, but it is nonetheless encouraging for the movie theatre industry, which has struggled since the pandemic.
The production pipeline was stopped in 2020 and 2021, which resulted in fewer films being released in theatres in 2022 despite the fact that audiences have started to return to the movies. Blockbuster movies continue to generate sizable, occasionally record-breaking domestic box office figures, but without a consistent stream of fresh material, the industry as a whole is still far below pre-pandemic levels.
Box office reduced to one-third since the pandemic
In comparison to 2019, there have been almost a third fewer wide releases (movies that open in more than 2,000 theatres), which has led to a reduction in the overall box office of about a third.
“We certainly applaud content makers when they decide to spend on quality movies,” said Jeffrey Kaufman, chief content officer and senior vice president of film and marketing at Malco Theatres. “But to date, no streaming company has committed to a robust theatrical distribution model, including Amazon. We would love if any streamer would support the theatrical space with wide-quality releases.”
Since production levels returned to normal in 2022, 2023 is already anticipated to be a stronger year at the domestic box office, but Amazon’s new film promises to provide the industry with still another confidence boost.