Cinema stocks jump on report of Amazon's $1B-plus investment in theatrical releases
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Cinema stocks jumped just before midday Wednesday alongside a report that Amazon.com (NASDAQ:AMZN) plans to spend $1B-plus annually to make movies it will release in theaters.
AMC Entertainment (AMC) spiked 6.2%; Cinemark (CNK) rose 7.5%; IMAX (IMAX) jumped 7.1%; and National CineMedia (NCMI) rose 5.5%. Cineplex (CGX:CA) is up 2.2% in Toronto.
Amazon plans to make 12-15 movies for theatrical release each year, Bloomberg reports - starting with a smaller number in 2023 and building that output over time.
Such ambitions put it squarely into the lower end of the realm of major Hollywood studios. Amazon spent $8.5B to acquire mini-major and longtime studio MGM, the home of franchises including Rocky and James Bond.
It would also mark a divergence from the strategy of a key streaming rival, Netflix (NASDAQ:NFLX). Netflix rankled the cinema industry by flooding the zone with a "streaming movie per week" approach, and when it does put its films in theaters (as with the new Glass Onion: A Knives Out Story) it's doing so for just a week before putting the film on streaming.
Amazon hasn't put quite as much into original film production to date, but the new report suggests a heavy ramp-up there as well as a friendlier relationship with the cinema industry.
Just two days after winning deal approval in Europe, Amazon closed its $8.5B purchase of MGM in March, acquiring an iconic name with more than 4,000 film titles and 17,000 TV episodes in its second-biggest acquisition ever.