In addition to the massive sales lift Amazon enjoyed as a result of COVID, the world's largest online retailer may now benefit from movie chains' continued struggle to rebound from the pandemic.
Amazon founder Jeff Bezos is weighing a possible acquisition of the severely distressed AMC Entertainment theater chain, although no specific offer has been tendered, according to a new report.
Bezos has been mulling a theater chain acquisition since Amazon Prime Video’s launch in 2006, according to sources cited by The Intersect, which says it reviewed internal Amazon information that included part of a pitch deck.
With Amazon putting increased focus on leveraging the streamer’s standalone and synergistic potential, and AMC’s stock down to around $4 to $5, Bezos — who is said to have his top entertainment executives and investment advisors exploring an acquisition — could decide the timing is right.
Amazon and rival Apple are each planning to invest more than $1 billion per year to produce movies that will get traditional, several-week-long debuts in theaters prior to debuting on their streaming services, Bloomberg reported this week. Amazon’s plan calls for ramping up production to release 12 to 15 such movies per year.
Amazon (like Apple) has not invested in the teams, infrastructure and marketing needed for big theatrical releases on an ongoing basis. But owning AMC, the world’s largest theatrical chain — topping the second largest, Cineworld — would obviously guarantee widescale releases for its films.
In addition to generating box office revenue, theatrical release is a key ingredient in attracting the top stars and directors who make movies that can draw large audiences. It can also be extremely effective in building consumer awareness, which in turn can drive signups and retention for the streaming services that will host them after the theatrical window.
Movie buzz that helps Prime Video compete with other major streamers and build its audience also makes Prime Video a more effective component in Amazon’s relentless push to grow members for its lucrative, multipronged Prime loyalty program.
As a side benefit, Amazon would also get AMC’s Perfectly Popcorn merchandise line, which is sold by Walmart and other retailers — and AMC’s interest in a South African gold mine — among the ventures launched by AMC CEO Adam Aron after the pandemic drove a 70% drop in box office receipts, notes The Intercept.
Amazon and AMC declined to comment on the report, and some sources said that if Bezos plans a move, he might wait until AMC’s value declines even further, or the company goes into bankruptcy.
AMC’s Aron continues to argue that the theatrical business is poised for a major turnaround, predicting 75% growth this year in the number of movies that reap $100 million or more in box office sales. Earlier this month, he won investors’ approval for a reverse stock split and the conversion of preferred unit stocks (APEs) into common company shares, to enable the company, which is burdened with $6 billion in long-term debt, to continue to raise cash.
But that move triggered a further dip in the company’s stock price, which at its current level is down 85% from its year-ago value of about $34 — and some analysts say it will backfire by further diluting AMC’s market value.
There was AMC theater in downtown Kazoo wasn't the first theater it was Rave when they built the theater closed in 2012. Became Almo Draft House I liked that the theater only lasted 3 & half years closed end of March of 2017, then AMC took over and opened in Nov 2017 and COVID in 2020 closed AMC it did open back up in Oct for the 4 weeks before Gov closed down the theaters once again which the gov was wrong to do that, AMC closed up for good no more movie theater in downtown Kazoo rumors are that they want another chain to take over AMC space.