Theatrical shares got a boost on Wednesday after a report Amazon plans to spend $1 billion annually on theatrical releases.
The tech company aims to produce between 12 and 15 feature films each year, Bloomberg reported, citing people familiar with the matter. A smaller number of films will be produced in 2023 as Amazon ramps up its production, the report said.
Cinemamark jumped 9% in the news, with IMAX up 6% and AMC increased by 5%.
Amazon Studios representatives did not immediately respond to a request for comment.
Amazon has deepened its investments in original content over the years through its streaming unit Prime Video and its film and television studios. The company spent $13 billion on content for its video and music streaming services last year, up from $11 billion in 2020, as it looks to remain competitive in the crowded media landscape.
Earlier this year, the e-retailer underpinned its media ambitions when it acquired legendary filmmaker MGM Studios for $8.45 billion.
Amazon founder and CEO Jeff Bezos has made no secret of his desire to grow the company’s media business, and he’s long believed it can help boost Prime subscriptions and additional purchases on its core e-commerce site .
Amazon has released movies in theaters in the past. It premiered the first two episodes of its Lord of the Rings series for a limited window in theaters, and its 2017 comedy The Big Sick opened in theaters. But the company has primarily released its original content directly to the Prime Video service.
While a $1 billion annual investment in film development is on the low end of what major Hollywood studios spend each year, it bodes well for the cinema business, which has struggled in the wake of the pandemic.
Audiences have returned to theaters, but with the production pipeline stalled in 2020 and 2021, fewer films were released in theaters in 2022. Blockbuster films continue to generate significant, sometimes record-breaking, domestic box office numbers, but without a steady stream of new content, the entire industry remains well below pre-pandemic levels.
There have been about a third fewer wide releases – films debuting in more than 2,000 theaters – and that has meant the overall box office is also down about a third compared to 2019.
Already, 2023 is expected to be a stronger year at the domestic box office as production levels return to normal in 2022, but Amazon’s additional film commitments give the industry another boost of confidence.