Amazon to invest $1 billion a year in movies for cinemas

Amazon.com Inc plans to spend more than $1 billion a year to produce movies that it will release in cinemas, according to people familiar with the company’s plans.

“The world’s largest online retailer aims to make between 12 and 15 movies annually that will get a theatrical release,’’ said the people, who asked not to be identified because the company is still sorting through its strategy.

Amazon will release a smaller number of films in cinemas next year and increase its output over time. That number of releases puts it on on a par with major studios such as Paramount Pictures.

Streaming services have eschewed cinemas with most of their original movies, or released the titles for less time and on fewer screens than traditional movie studios.

Netflix Inc in particular has aggravated cinema chains by releasing more than a movie a week for viewers at home.

The streaming giant released a sequel to Knives Out in cinemas on Wednesday. It will stay there for just one week, however, before heading to streaming next month. The original film grossed $312.9 million theatrically in 2019.

Amazon has been more open to cinemas than Netflix, but has yet to invest as much money in original movies.

While Netflix releases close to 100 movies a year, Amazon puts out just a couple dozen, many in languages other than English.

Even though Amazon is in a costcutting mode, the company is ramping up its investment in original movies following the $8.5 billion acquisition of MGM, a 98-year-old Hollywood studio that released Ben-Hur and Legally Blonde.

MGM’s two top film executives, Michael DeLuca and Pam Abdy, left Amazon just a month after it acquired the company, and Amazon Studios chief Jennifer Salke has been looking for an executive to run the film business.

Amazon first got the attention of the movie business by acquiring projects at the Sundance Film Festival and releasing them in thousands of theaters for months, a cycle that resembled those of a traditional studio.

It earned Academy Award nominations for The Big Sick and Manchester by the Sea. While those movies delighted critics, they were only modest successes at the box office.

Cinemas will welcome the new product from Amazon, whenever it comes. US ticket sales are down more than 33% from 2019, the last full year before the pandemic closed theaters.

Many of the biggest movie studios are part of companies that have started releasing original movies online to boost their streaming services.

Yet despite declining ticket sales, filmmakers, Hollywood veterans and talent representatives are all pushing for media companies to embrace cinemas.

They believe a big hit in cinemas, such as Top Gun: Maverick, is more lucrative than even the biggest streaming movie.