After a three-month slide on Wall Street due to the struggling box office, movie theater stocks rebounded on Wednesday after Bloomberg reported that Amazon Studios plans to dramatically increase the number of films it releases in theaters.
Cinemark stock rose 12.6% to close Wednesday at $13.82; Imax shares rose 9% to close at $15.78; and AMC Entertainment shares closed on at $7.64, up nearly 5%. (Meanwhile, AMC’s APE stock actually fell 4% to $1.21.)
Amazon declined to comment on the Bloomberg report, which cited unnamed insiders about a plan to ramp up production of feature films to release as many as 12 to 15 in theaters annually at an annual cost of $1 billion. The number of theatrical releases es expected to be smaller in 2023 as the studio expands its production capacity.
In the race for streaming supremacy, Amazon spent $13 billion on content for its video and music streaming services in 2021, up from $11 billion the year prior, and this year acquired the legacy Hollywood studio MGM for $8.4 billion in an effort to expand its streaming library — any future James Bond movies would be expected to open in theaters.
But MGM bosses Mike De Luca and Pam Abdy recently exited to take over Warner Bros., so Amazon will need a senior film executive to oversee any ramp up of theatrical features.
During its earliest years, Amazon Studios regularly partnered with traditional distributors like Lionsgate and Roadside Attractions to release art-house films and festival acquisitions such as the 2016 Oscar winner “Manchester by the Sea” and the 2017 Sundance hit “The Big Sick,” which grossed $42.8 million at the domestic box office.
But starting in 2019 under studio chief Jennifer Salke, Amazon Studios pivoted away from theatrical releases for awards contenders to invest more in big-budget productions exclusively for its Amazon Prime streaming service, with series like “The Boys” and “The Lord of the Rings: The Rings of Power” being two of the most prominent shows to emerge from that strategy.
A recommitment to theatrical releasing would provide another facet to Amazon’s efforts to expand its media division.
Movie theaters will welcome this move with open arms, as the box office has struggled through most of 2022 to continue its post-pandemic shutdown recovery due to production backlogs diminishing the number of films released. Those backlogs are expected to be cleared in 2023, but Amazon’s contributions could help fill in some gaps the current box office hasn’t filled in yet, specifically in January and February, when the market historically relies on an interest in Oscar-contending prestige films that has vanished over the past year.
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