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Amazon Plans To Spend $1 Billion Annually Producing Theatrical Films
Amazon Studios is committing to spend $1 billion a year to produce films that will receive a theatrical release. The retail giant and its streaming service Prime Video have produced several films like Manchester by the Sea, The Big Sick, and Sound of Metal that received both critical acclaim and Academy Awards. While the streaming service initially struggled to compete with Netflix when it came to producing original series, it succeeded at bringing its film releases to the big screen, with Manchester by the Sea running beyond expectations to gross over $79 million against its $9 million production budget. The studio has since helped produce the anthological Welcome to the Blumhouse film series and acquiring a number of tentpole projects, including Coming 2 America, The Tomorrow War and Without Remorse.
Now Amazon is looking to double down on its efforts to be a serious contender at the box office, committing $1 billion a year to produce films for theaters. Bloomberg reported that this commitment is close to Universal and Warner Bros.'s yearly budget, indicating Amazon's interest in competing directly with the major studios. The long-term goals for the production company are to produce between 12 and 15 films a year, a pace set by the average studio's release schedule. However, Amazon Studios will release only a fraction of that many films next year, increasing the amount of releases over time.
Amazon's Theatrical Plan Is Good News For Bond & Other MGM Franchises
In March 2022, Amazon acquired the famed film studio, MGM, in a massive $8.5 billion deal. Not only did this deal secure the streaming rights to MGM's massive catalog of films and television shows, but it also gives Amazon the rights to use any of these properties in future projects. Most notably, this gives Amazon the rights to create the next set of James Bond films, likely a significant motivator behind the acquisition. With Daniel Craig exiting the franchise after 2021's No Time to Die, it is the perfect opportunity for Amazon Studios to leave their own mark on the iconic franchise.
MGM was one of the original Big Five studios during the early days of Hollywood responsible for producing some of the most iconic films of all time. From Gone With the Wind to Rocky to Legally Blonde, the studio has been a major player in the industry for nearly a century and its cultural significance is a factor in Amazon Studios acquisition. Amazon's vision to revitalize MGM sets it in stark contrast to the other streaming services, all of which have been major industry disrupters. The studio's respect for the industry's tradition may just be a public relations move, but a smart one nonetheless, especially with their new plans to spend $1 billion to produce theatrical films.
The film distribution industry has still struggled to recover from the massive losses theaters experienced in 2020 during the COVID-19 pandemic as more people choose to stream movies at home. A push from one of the leading streaming content producers might be the jump start the industry needs. When the news of Amazon's plan for 15 theatrical releases a year hit Wall Street, shares for AMC Entertainment Holdings Inc. rose 9.2 percent and Cinemark Holdings Inc. rose by about 12 percent, marking a promising sign for the marriage of the two industries. However, Amazon Studios has a long road ahead if they intend to bring the industry back to its pre-pandemic state.
