Insights

Amazon May Acquire Movie Theater Chain

Amazon-movie-theaters

According to Bloomberg, Amazon may be looking to acquire Landmark Theatres, a major movie theater chain. “The chain’s owners have been working with investment banker Stephens Inc. on a possible sale,” say Bloomberg’s anonymous sources, although no finite decisions have been made.

Amazon has placed heavy focus on entertainment, spending $4.5 billion on original content, such as TV shows and movies, in 2017 — second only to Netflix’s $6 billion budget, and well above HBO’s $2 billion. In addition, Amazon has dipped their toes into the theater business already, offering exclusive Prime member screenings of movies before their official release date.


Why it matters

Original content is now a keystone in Amazon’s ecosystem. Amazon Video incentivizes customers to purchase (or stick with) a Prime subscription, and as we’ve seen, Prime Members across the board have been shown to spend nearly twice as much as non-members. And, the deeper a customer is integrated into Amazon’s ecosystem, the more they end up spending on the marketplace — Echo owners spend on average $400 more than Prime members per year. Similar to their strategy with Twitch, Amazon is likely planning to leverage movie theaters as a funnel to gain Prime subscribers from varying demographics, and as a result, benefit from more sales, more data, and more customer loyalty.