Apple and Amazon Plan to Spend Billions on Movies for the Big Screen. Will the Pricey Gamble Pay Off?
HOLLYWOOD, CA – It may have been implausible a few years, heck, even a few months ago, that tech giants like Apple and Amazon would spend billions on theatrical movies.
And yet, Apple is reportedly planning to invest $1 billion per year to make films that’ll play exclusively in cinemas. The news, which was first reported by Bloomberg, comes months after Amazon’s similar commitment to putting 12 to 15 new movies in theaters annually. Could it be that newer Hollywood players actually care about the big screen?
“Having multiple large streaming platforms decide they need theaters shows there is value to theatrical, which was the biggest concern,” says Eric Wold, a media and entertainment industry analyst with B. Riley Securities.
For Apple and Amazon, the move is not exactly a benevolent bid to help out beleaguered movie theaters; it’s a way to promote their respective streaming services. Ideally, the more attention that a movie gets on the big screen, the more people will want to see what else is available online — and sign up for (or keep paying) monthly subscriptions to AppleTV+ or Prime Video. It also helps to lure top talent, who don’t want their labors of love to get lost in the shuffle of streaming, and it plays a part in getting big-budget movies into the black.
“There’s an advantage to streamers to put movies into theaters,” Wold says. “You can get incremental revenue from other wells compared to going straight to streaming.”
There’s also an inherent risk. Audiences have never been pickier. Long gone are the days when a rom-com that scored 25% on Rotten Tomatoes could still earn $150 million at the box office. Just simply putting a movie in theaters at a time when there’s too much disposable content on the big and small screen isn’t enough. Neither Apple nor Amazon has shown consistency with compelling content, yet they will need to produce good movies — and market them effectively — to cut through the noise and get people to show up. Sometimes, quality isn’t even enough.
For theater owners, though, it’s nothing short of euphoria to learn that more Hollywood companies — not less — plan to make movies for multiplexes. Across the movie industry, cinema chains are struggling to recover from the pandemic as ticket sales remain down roughly 35% from pre-COVID. Exhibitors have pointed to lack of product as the reason behind the downturn in attendance.
“It’s very encouraging,” says Greg Marcus, CEO of Marcus Theatres, the fourth-largest U.S. circuit. “We believe in the importance of theatrical in an entertainment ecosystem. A theatrical run sets the tone and distinguishes product in a way that nothing else can…with the appropriate length window so the customer is incentivized to go to theaters,” he adds.
Apple and Amazon’s desire to work with theaters continues an abrupt shift from pandemic-era strategy, not just when it comes to streamers but also traditional studios. During the prolonged stretch in which cinemas were either closed or operating at reduced capacity, Disney, Universal, Warner Bros. and others took the time to experiment with release plans. From “Black Widow” to “Trolls World Tour,” dozens of buzzy titles either skipped the big screen entirely or were put on streaming platforms on the same day as their theatrical release.
Distributors have, for the most part, reverted back to some version of an exclusive theatrical window. They found it leads to greater financial success for big-budget blockbusters and indies alike because there’s more money to be earned down the line from ancillary markets, like home entertainment.
Pandemic or not, most of Apple and Amazon’s previous original movies were either exclusive to the streamer or were granted limited theatrical runs. “CODA,” for example, which eventually brought Apple its first Oscar for best picture, screened in select theaters but grosses weren’t reported. But “CODA” seems to be an exception. Other expensive tentpoles, like Tom Holland’s PTSD drama “Cherry” or the animated “Luck,” came and went without much fanfare.
Already, Apple has partnered with Paramount to release Martin Scorsese’s big-budget crime epic “Killers of the Flower Moon,” which stars Leonardo DiCaprio and Robert De Niro, in theaters sometime in 2024. And Amazon is bringing Ben Affleck’s sports drama “Air” to multiplexes before it goes to Prime Video.
Otherwise, it’s not clear what else from Apple or Amazon will play in theaters — or if either company intends to report ticket sales akin to traditional studios. Apple doesn’t have its own theatrical distribution department, which explains why Paramount is releasing the $100 million-budgeted “Killers of the Flower Moon,” but they haven’t struck agreements on other titles. Since Amazon acquired MGM last year, those companies are expected to work together on distribution.
Without getting too greedy, exhibitors are also wondering: Will Netflix ever join in the fun? Netflix, which has more subscribers than its rivals, has dabbled in theatrical, particularly with its “Knives Out” sequel “Glass Onion.” But the company mostly wants its movies to populate its digital queue, not movie theater marquees. Netflix’s CEO Ted Sarandos has been clear the streamer is ultimately in the business of growing its subscriber base, not selling movie tickets.
Many of the films on Apple’s upcoming slate, including director Matthew Vaughn’s globe-trotting spy thriller “Argylle” with Henry Cavill, as well as Ridley Scott’s historical drama “Napoleon,” starring Joaquin Phoenix as the French conqueror, come with mega price tags as well as filmmakers who prioritize the big screen. Box office grosses may not move the needle for a company as big as Apple, but exhibitors believe the option to watch those films in theaters at least gives them the chance to be part of the cultural conversation.
“Going to the movies is an active experience, compared to the passive experience of watching at home,” Marcus says. “When you go to the movies, you make a choice to get off your sofa and pick a showtime. Those experiences bring back great memories.”
SOURCE: Variety – By Rebecca Rubin