The largest commitment that Amazon has made to cinemas is a plan to invest more than one billion dollars annually in the production of movies that will be distributed by Amazon. Amazon, one of the biggest online retailers, wants to make 12 to 15 movies a year that will be shown in theaters.
In 2023, Amazon will also release fewer movies in theaters and increase its output. This puts the company in competition with major studios like Paramount Pictures.
Unlike traditional movie studios, streaming services have affected theaters with the majority of their original films and released them for shorter periods of time and on fewer screens. Netflix Inc., in particular, has aggravated movie theater chains by releasing more than one movie per week for home viewing.
While Amazon has been more accommodating to movie theaters than Netflix, it has not yet invested as much in original films. Netflix distributes nearly 100 films annually, while Amazon distributes a few dozen in larger number of languages other than English.
Given that Universal and Warner both have similar budgets, Amazon could easily increase revenue by 15% to 20%.Theater operators’ stocks rose as a result of this news. After spending 8.5 billion dollars to acquire MGM, a Hollywood studio, Amazon is increasing its investments in original films as well as cutting costs.