Movie stocks rose Wednesday after Amazon plans to spend a billion dollars a year on theatrical releases.
The tech company plans to make 12 to 15 videos for theaters a year, Bloomberg reported, citing other people familiar with the matter. Fewer films will be produced in 2023 as Amazon ramps up production, according to the report.
Cinemark jumped 11% on the news, with IMAX up 7% and AMC 5%.
Amazon declined to comment.
Amazon has deepened its investment in original content over the years through its Prime Video streaming unit as well as its film and television studios. It seems to remain competitive in the crowded media landscape.
Earlier this year, the store bolstered its media ambitions by buying legendary filmmaker MGM Studios for $8450 million.
Amazon founder and CEO Jeff Bezos has made no secret of his preference for growing the company’s media business, and it’s long believed he can help boost Prime subscriptions and more purchases on its main e-commerce site.
Amazon has released videos in theaters in the past. He created the first two episodes of his Lord of the Rings series in theaters over a limited period, and his 2017 comedy “The Big Sick” was screened in theaters. But the company most commonly featured its original content directly on the Prime Video service.
While a $1 billion annual investment for the film’s progression is at the end of Hollywood’s early studio decade, it’s a positive sign for the theater industry, which has struggled in the wake of the pandemic.
Audiences returned to theaters, but as the production line stagnated in 2020 and 2021, fewer films were released in theaters in 2022. Content, the entire industry remains well below pre-pandemic levels.
There have been about a third fewer large-scale releases (films debuting in over 2000 theaters) and that means the overall box is also down around a third compared to 2019.
“In fact, we applaud content creators when they 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 physically powerful film distribution. We would like a transmitter to help the theater area with high-quality releases. “
2023 is already expected to be a stronger year at the domestic box office, as production levels returned to general in 2022, but Amazon’s additional cinematic commitments are giving the industry a new boost in confidence.
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