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How Amazon Plans to Crush Netflix in Movie Theaters

By
Don Reisinger
Don Reisinger
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By
Don Reisinger
Don Reisinger
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April 15, 2016, 11:29 AM ET
Amazon.com Illustrations Ahead Of Earnings Figures
The Amazon.com Inc. Prime logo is displayed on computer screens for a photograph in Tiskilwa, Illinois, U.S., on Wednesday, April 23, 2014. Amazon.com Inc. is scheduled to release earnings figures on April 24. Photographer: Daniel Acker/Bloomberg via Getty ImagesPhotograph by Daniel Acker—Bloomberg via Getty Images
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The fight for control over streaming consumption is coming to a movie theater near you.

Speaking at CinemaCon 2016 on Thursday, Amazon Studios marketing and distribution chief Bob Berney said that all of his company’s “films will be released theatrically.” He added that Amazon (AMZN) will partner with movie theaters and deliver “an aggressive marketing campaign to bring audiences to your theaters,” according to The Wrap, a site that tracks the film industry.

Amazon, which operates a popular streaming-video service, has been gobbling up content at a rapid clip in recent months. In February, Amazon Studios acquired the North American rights to Woody Allen’s next film, an as-yet titled romantic comedy set in the 1930s, for a reported $20 million. Amazon Studios chief Roy Price previously said that the company has high hopes for movies and eventually plans to release 16 movies per year. According to The Wrap, Amazon Studios acquired six films from the Sundance Film Festival this year, including the new Kenneth Lonergan film Manchester By the Sea.

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Amazon Studios is best known for its successful television series, including Mozart in the Jungle, Transparent, and others. However, in a bid to compete with Netflix, its chief competitor in the streaming business, the company ostensibly believes that it can gain an advantage in films, where Netflix (NFLX) hasn’t tended to be the most popular of buyers.

In October, Netflix made some enemies among movie theater chains, including AMC, after the company released its first major feature film Beats of No Nation. While Netflix agreed to offer the movie in theaters, it also released the film on the same day to its streaming service customers. Last year, in a response to Netflix’s move, major movie theater chains, including AMC and Cinemark, wouldn’t show the film, which stars Idris Elba, due to the way the company was planning to release its movie.

Traditionally, theaters are given 90 days between the premiere date and when a film is released on DVD, on-demand, or other channels. That gives theaters enough time to attract audiences and make some cash on popular films before they hit consumer homes. By offering its movie to streamers on the same day Netflix delivered it to a decidedly small number of theaters, the company flipped those unofficial rules on their head.

“Netflix is not serious about a theatrical release,” Patrick Corcoran, vice president of the National Association of Theatre Owners, told Wired in an interview last year. “There isn’t a real commitment.”

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Seemingly seeing an opportunity, Amazon appears to be trying to allay fears at CinemaCon, the biggest annual event for the motion picture industry, and the one where many of the top people in the industry attend, that it won’t be another Netflix.

Adding to what Berney said, Price said at CinemaCon that “theatrical runs position a movie as a real movie in customers’ eyes,” according to The Wrap. He reportedly added that Amazon Studios’ goals are “aligned” with those of movie theaters.

While that sounds like Amazon might follow its past moves, there’s no guarantee. Things can change quickly in the streaming business, and as theaters know all too well, they’re competing against those streaming alternatives. So, while Amazon might want to play nice, it’s still a potential threat.

Neither Netflix nor Amazon Studios immediately responded to a request for comment.

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