According to a recent Bloomberg report, internal sources at Amazon say the company plans to invest $1 billion in theatrical film releases.
As AMC's management pointed out during the company’s latest earnings report, film production is the single most important factor affecting the theater chain’s overall success.
The Amazon news was positively received by AMC and other theater chain operators. Considering the volatile nature of, and high short interest in, AMC stock, we’ll be on the lookout for sharp upward moves in AMC.
Tech behemoth Amazon (AMZN) - Get Free Report is expected to invest about $1 billion a year in film production and releases, Bloomberg has reported. AMC Entertainment (AMC) - Get Free Report shares traded up nearly 5% on the bullish news. Other publicly traded theater companies saw similar moves.
According to the Bloomberg report, Amazon will produce a small number of movies in 2023 as it builds experience within the film production and release niche. This marks the first time that a major streaming player has opted to make a big push toward in-theater releases.
Amazon's move into theatrical film releases, however, should not be seen as coming totally out of left field. Early this year, the company released two episodes of its Rings of Power series in theaters. And in 2017, the Amazon-produced rom-com “The Big Sick” was also released in theaters - to much audience and critical acclaim.
Amazon has also been investing in original content through its streaming unit, Prime Video. In 2021 alone, Amazon spent about $13 billion on video and music streaming services. In 2020, its investment was $11 billion.
In 2021, Amazon also purchased production giant MGM for $8.45 billion. That meant Amazon acquired MGM’s extensive film collection, bolstering its Prime offerings, but it also deepened Amazon’s bench of human capital and expertise within the production industry.
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