Amazon wants its films in theaters to raise the profile of its content (AMZN)

BI Intelligence

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Amazon is intent on distributing its films through traditional theater releases, according to Variety.

Additionally, the company will start distributing its movies itself, instead of partnering with independent distributors. While Amazon does make money at the box office, its bigger goal is likely to raise the profile of its original content, which can help reel consumers into Amazon’s ecosystem and potentially drive them to make more e-commerce purchases.

Amazon also plans to develop more films in-house. Moving forward, Amazon expects less than 50% of its movies to be acquired from ­­­Cannes, Sundance, and other film festivals. The company also plans to release 12 to 14 films per year moving forward, with a budget of $5 to $35 million per film.  

Here are some key reasons why a theatrical distribution strategy makes sense for Amazon:

• Theatrical releases can garner prestigious awards that streaming-only releases can't. A movie must be screened at Los Angeles theater for at least seven consecutive days to be nominated for an Academy Award. Amazon’s film Manchester By The Sea won the Oscar for Best Original Screenplay, which helped put Amazon on the map in the creative community and very likely attracted viewers to watch the film.
• It helps differentiate the company’s films from over-the-top (OTT) rival Netflix.Netflix releases its films exclusively through its streaming service because it's focused on driving consumers to its streaming service to up its subscriber count, which currently stands at over 100 million. Amazon can carve out its own lane in creating films for movie theaters and attracting consumers offline, instead of having its films compete against Netflix’s original films online directly.
• The company may be positioning itself to purchase a movie theater chain to strengthen its ad data. Such a deal would allow Amazon access to a wealth of offline consumer data it could use to bolster its advertising business. Amazon’s nearly $14 billion acquisition of Whole Foods is a big indication the company is already interested in acquiring brick-and-mortar businesses to strengthen its overall business, and bridge the offline-to-online gap.

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