Amazon continues to forge its own path in the media landscape. According to a report from Bloomberg, the e-commerce juggernaut plans to spend more than $1 billion annually to fund a solid slate of theatrical films in the coming years.
Bloomberg’s Lucas Shaw reports that Amazon’s new theatrical venture will begin next year, with a smaller slate of films, and the company will build from there until it releases 12-15 films each year. If Amazon hits that number of theatrical releases per year, it will put the company in line with some of Hollywood’s biggest studios, like Paramount.
The move puts more focus on Amazon’s $8.5 billion acquisition of MGM Studios earlier this year. It turns out the company wasn’t just interested in MGM because of its vast library of movies and TV series. Now, Amazon will have a film production infrastructure already in operation, instead of having to build one from scratch.
The move will no doubt be music to the ears of theater owners. Cinema ticket sales are still down 33% from 2019, the last full year that cinemas were open before the COVID-19 pandemic. Hollywood executives are also heavily invested in seeing theatrical movies rebound, as they tend to generate millions more in profit than streaming-exclusive films.
The strategy will also be closely watched by other streaming services. Netflix has had a notoriously fragile relationship with movie chains, and last month the company’s co-CEO Ted Sarandos reiterated his stance on keeping Netflix movies in theaters for an extended period.
“We’re in the business of entertaining our members with Netflix movies on Netflix… There’s all kinds of debate going on all the time, back and forth,” Sarandos said. “But there’s no doubt internally that we make our movies for our members, and we really want them to watch them on Netflix. And, of course, with a week of theatrical release, most people will see them on Netflix. Like they see all the movies. Most people watch most movies at home.
Amazon will be in a unique position to capitalize on its theatrical films if they succeed financially. The company can then make them available for rental or purchase on its own website before finally migrating them to its Prime Video streaming service. At $1 billion a year, the gamble is expensive for Amazon, but the company could see a massive financial return on its investment.