Amazon Studios has committed to spending $1 billion per year on films that will be released theatrically. The retail giant and its streaming platform Prime Video have developed several films that have received both critical acclaim and Academy Awards, including Manchester by the Sea, The Big Sick, & Sound of Metal. While the streaming service initially struggled to compete with Netflix in terms of original series, it was successful in bringing its film releases to the big screen, with Manchester by the Sea grossing more than $79 million against its $9 million production budget. Since then, the studio has acquired a number of tentpole productions, including Coming 2 America, The Tomorrow War, and Without Remorse, as well as helped produce the anthological Welcome to the Blumhouse film series.
Amazon is now doubling down on its efforts to become a serious box office contender, committing $1 billion per year to producing films for theaters. According to Bloomberg, this commitment is comparable to Universal and Warner Bros.’ annual budgets, indicating Amazon’s desire to compete directly with the major studios. The production company’s long-term goals are to produce around 12 and 15 films per year, which corresponds to the average studio’s release schedule. Even so, Amazon Studios will release only a fraction of that many movies next year, gradually increasing the number of releases.
Amazon’s Theatrical Plan Benefits Bond And Other MGM Franchises
Amazon will pay $8.5 billion for the famed film studio MGM in March 2022. This agreement not only secures the streaming rights to MGM’s vast library of films and TV shows, but it also grants Amazon the right to use any of these properties in upcoming projects. Most notably, this gives Amazon the rights to create the next series of James Bond films, which is likely a major motivator for the acquisition. With Daniel Craig leaving the franchise after 2021’s No Time to Die, Amazon Studios has a unique opportunity to leave their mark on the iconic franchise.
During the early days of Hollywood, MGM was one of the original Big Five studios, producing a number of the most iconic films of all time. The studio has been a major player in the industry for nearly a century, from Gone With the Wind to Rocky to Legally Blonde, and its cultural significance is a factor in Amazon Studios’ acquisition. Amazon’s vision to revitalize MGM contrasts sharply with the other streaming services, each of which has been major industry disruptors. The studio’s respect for industry tradition may be merely a public relations move, but it is a wise one, especially given their new plans to spend $1 billion on theatrical films.
As more people choose to watch movies at home, the film distribution industry is still struggling to recover from the massive losses theaters suffered in 2020 during the COVID-19 pandemic. A push from one of the industry’s leading streaming content producers could be just what the industry needs. When news of Amazon’s plan for 15 theatrical releases per year broke, shares of AMC Entertainment Holdings Inc. rose 9.2 percent & Cinemark Holdings Inc. rose around 12 percent, indicating a promising sign for the marriage of the two industries. However, restoring the industry to its pre-pandemic state will be a difficult task for Amazon Studios.
Source: Bloomberg