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Amazon to Spend $1 Billion Per Year on Theatrical Films

Amazon Acquisition of MGM

Amazon is reportedly planning to spend up to USD $1 billion per year on 12-15 feature films that will have a theatrical release. The news comes at a time when there is a shift away from exclusive or simultaneous release of big budget films on streaming platforms, in favour of a traditional theatrical window of exclusivity. Amazon would thus be joining both streamers such as Netflix and traditional studios such as Disney and Warner Bros in affirming the financial importance of a theatrical exclusivity window.

According to Bloomberg, which first reported the plans, Amazon will initially release a handful of films in cinemas next year and grow the number of theatrical films over time. The move would eventually put Amazon on par with legacy Hollywood studios such as Paramount and Disney. Shares of cinema companies rose by between two and seven percent on the news of the move. Amazon previously spent USD $8.5 billion to acquire MGM and its library of titles that included the James Bond, Pink Panther and Rocky films. With around 24 film releases per year, Amazon is still far behind Netflix, which puts out around 100 films per year globally on its streaming service.

The news comes just as Netflix is releasing “Glass Onion: a Knives Out Mystery” for a one week “sneak preview” in multiplexes belonging to all the major cinema operators in the United States and Europe, a full month ahead of the film’s streaming release. With new CEOs in charge of both Disney and Warner Bros., the two studios that had pushed day-and-date releases for their respective streaming platforms Disney+ and HBO Max are now re-evaluating and even re-affirming the importance of the theatrical release window in terms of generating lifetime value for their largest feature films.

Source : Bloomberg