Cinema Stocks Jump Amid Report Apple Plans $1 Billion Theatrical Movie Push
Cinemas stocks got a boost Thursday after a report that Apple plans to splash $1 billion a year on producing movies that will be sent to theaters.
Bloomberg, citing unnamed sources, reported that the tech giant plans to release a few movies in theaters this year, while ramping up its theatrical slate for a greater number of releases in future years. Apple could not be reached for direct comment on its push into theatrical releases, but it has been well telegraphed.
The tech giant recently hired former Disney marketing and content exec Ricky Strauss to join Apple TV+, which suggests Apple is serious about growing its streaming division and potentially its theatrical film efforts. And Apple, in recent discussions with major exhibitors, has indicated it wants to follow Amazon with its own $1 billion theatrical movie push, to include releasing 12 to 15 movies in theaters each year, starting in 2023.
That theatrical movie push follows the e-commerce giant acquiring MGM Studios for $8.45 billion. MGM is home of big screen franchises, including the James Bond series, which is part of the studio’s 4,000 film title library. Amazon always intended to have MGM keep making movies.
As likely beneficiaries of a theatrical push by Apple, cinema stocks got a lift from the news. Shares in Cinemark closed at $13.24, up nearly 6 percent, after at one point trading at $13.88 on Thursday. Rival AMC Entertainment Holdings, parent of AMC Theatres, also jumped to an intra-day high of $4.66, before ending the day up 3 percent at $4.47 a share.
Stock in Imax, which jumped to a high of $18.66 on Thursday morning after news of the $1 billion theatrical movie splash, ended the day up 2 percent at $17.98. And Canadian exhibition giant Cineplex saw its shares close at $8.00, up 4 percent, after reaching an intra-day high earlier in the day at $8.17.
As with Amazon, Apple is expected to use theaters to market upcoming releases on its Apple TV+ platform. The latest release slate for Apple TV+ includes Ridley Scott’s Napoleon, the star-studded spy thriller Argylle, and Martin Scorsese and Leonardo DiCaprio’s Killers of the Flower Moon.
Any major pivot to theaters could also help Apple TV+ increase its subscriber base while also attracting more boldface Hollywood names and titles to its movie slate.
Netflix has done small platform releases for select festival circuit films and some of its international titles have received small local releases. But the streaming giant has not yet followed the lead of Amazon and Apple with its own big box office play.
That said, the theatrical ambitions of streamers has been welcomed by major exhibitors, which saw the initial moves by Amazon and Netflix as the beginning of a greater push into the multiplex.
“With all the benefits that we continue to hear from our traditional partners about how movies they’re releasing theatrically are providing greater benefits to their streaming platforms, we’ve thought for a while that it’s only a matter of time before the streaming companies get into theatrical in a much more significant way,” Cinemark CEO Sean Gamble told analysts during a recent fourth quarter conference call where he talked about discussions with Apple.
Rival exhibitors Cineplex and AMC Theatres have also shared about their own talks with online players, including Amazon and Apple, about putting their movies on the big screen.
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