Movie theater stocks pop after report says Amazon plans to spend $1 billion on releases

Cinemas stocks got a boost Wednesday aft a study said Amazon plans to walk $1 cardinal a twelvemonth connected theatrical movie releases.

The tech institution plans to marque betwixt 12 and 15 movies for movie theaters each year, Bloomberg reported, citing radical acquainted with the matter. A smaller fig of films volition beryllium produced successful 2023 arsenic Amazon builds up its output, the study said.

Cinemark jumped 11% connected the news, with IMAX up 7% and AMC up 5%.

Amazon declined to comment.

Amazon has deepened its investments successful archetypal contented implicit the years done its Prime Video streaming unit, arsenic good arsenic its movie and tv studios. The institution spent $13 cardinal connected contented for its video and euphony streaming services past year, up from $11 cardinal successful 2020, arsenic it looks to stay competitory successful the crowded media landscape. 

Earlier this year, the e-retailer bolstered its media ambitions when it acquired legendary movie shaper MGM Studios for $8.45 billion. 

Amazon laminitis and enforcement president Jeff Bezos has made nary concealed of his desire to grow the company's media business, and helium has agelong believed that it tin assistance thrust Prime subscriptions and further purchases connected its halfway e-commerce site. 

Amazon has released movies successful theaters successful the past. It premiered the archetypal 2 episodes of its Lord of the Rings bid successful cinemas for a constricted window, and its 2017 drama "The Big Sick" was shown successful theaters. But the institution has chiefly launched its archetypal contented straight connected the Prime Video service.

While a $1 cardinal yearly concern for movie improvement is connected the little extremity of what large Hollywood studios walk each year, its a affirmative motion for the movie theatre business, which has struggled successful the aftermath of the pandemic.

Audiences person returned to cinemas, but due to the fact that the accumulation pipeline was stalled successful 2020 and 2021, less movies person been released successful cinemas successful 2022. Blockbuster films proceed to thrust significant, sometimes grounds breaking, home container bureau numbers, but without a dependable slate of caller content, the wide manufacture remains importantly beneath prepandemic levels.

There has been astir one-third less wide releases — films that debut successful much than 2,000 theaters — and that has meant that the wide container bureau is down astir one-third arsenic good compared to 2019.

"We surely applaud contented makers erstwhile they determine to walk connected prime movies," said Jeffrey Kaufman, main contented serviceman and elder vice president of movie and selling astatine Malco Theatres. "But to date, nary streaming institution has committed to a robust theatrical organisation model, including Amazon. We would emotion if immoderate streamer would enactment the theatrical abstraction with wide prime releases."

Already, 2023 is expected to beryllium a stronger twelvemonth astatine the home container office, arsenic accumulation levels returned to mean successful 2022, but Amazon's further movie commitments gives the manufacture different assurance boost.