Theaters struggle as Big Tech looks to invest
Domestic box office revenue is down 12% from this time last year, when theaters were still grappling with the fallout from the historic actors and writers strikes.
Why it matters: Theaters never made a full comeback from COVID-19 and experts don't think they ever will. But for tech giants looking to establish themselves in Hollywood, theatrical distribution matters.
Zoom in: Amazon MGM Studios will release 12 to 14 films in theaters in 2026 and potentially 16 films in 2027. Most films will spend 45 days in theaters before being available as pay-per-view and later streaming on Prime Video.
The strategy is a big expansion on its number of titles and length of exclusivity in theaters. Previously, the studio released five to eight movies in theaters annually with no set theatrical window, per the New York Times.
Amazon shared some details of its new strategy at South by Southwest last month, per Deadline, and elaborated at CinemaCon this week.
Zoom out: The shift comes amid a broader shakeup at Amazon MGM Studios. Jennifer Salke exited as head of the studio last week after seven years. Her position will not be filled, per an internal memo.
Courtenay Valenti, head of film, streaming and theatrical at Amazon MGM Studios, spoke on the new strategy at SXSW and in conversation with the Times.
The big picture: The Academy of Motion Picture Arts and Sciences expanded theatrical eligibility requirements for films to qualify for the Best Picture category, beginning last year.
Those new requirements put more pressure on streamers to distribute their films in more cities on the big screen.
Between the lines: Theater chains have been investing in upgrades, including new projectors, luxury seats and bars, to improve the customer experience.
AMC Entertainment is adding 40 new Dolby Cinema theaters in the U.S. by the end of 2027. It previously shared plans for 4DX auditoriums.
Reality check: The box office is still the place most studios rely on for profits. Movie studios have invested more in sequels and familiar franchises to maximize reliable revenues. But this year, some storylines have flopped.
Disney's latest Marvel film, "Captain America: Brave New World," faced a 68% drop at its second weekend in the box office. "Snow White," the live-action remake, also performed poorly in its second weekend.
What to watch: The summer box office includes more big remakes and sequels. Disney's slate includes "The Fantastic Four: First Steps," "Lilo & Stitch" and "Freakier Friday."
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