Amazon will spend $1B on movies for theatrical release

Amazon will spend $1B on movies for theatrical release

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Amazon.com Inc. is going to invest $1 billion in movies that will hit the theaters sometime next year, according to a report published today by Bloomberg.

As much of the tech industry is struggling and laying people off left, right, and center, Amazon is piling money into the entertainment industry. While a billion does sound like a lot of money, it’s about the amount the company paid to make the its show “Lord of the Rings: Rings of Power.”

Like many other tech companies, Amazon is going to let go thousands of its employees, although considering it has about 800,000 folks on its payroll, a few thousand won’t be a considerable part of its workforce – unlike what’s happened to Twitter Inc. and Facebook Inc.

Bloomberg, which said it has spoken to various people familiar with Amazon’s movie ambitions, said Amazon will release between 12 and 15 movies for the theaters next year. It will start with smaller films, and if there is some success, it will invest more money.

The move is not surprising, since traditional movie makers have jumped into digital in the past, but Amazon wants to leave one foot in while testing the waters outside. It’s also a bold move considering movie ticket sales in the U.S. have not looked very healthy for quite some time.

It was good news for cinema stocks, with various companies seeing their stocks jump right after the news hit. Streamers such as Netflix Inc. have also played with releasing their content in movie theaters before they hit the streaming service, with reports now saying that cinema chains are trying to make more such deals with streamers.

In March, Amazon finally acquired MGM. It paid $8.45 billion for the movie giant and received about 4,000 film titles and 17,000 TV episodes, much of which was classic content. This purchase, the second-largest acquisition of Amazon’s behind Whole Foods, bolstered the company’s position in the entertainment industry. If it works out, this new investment could see that position become stronger yet.

Photo: Alex Litvin/Unsplash

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