Amazon made its name online by becoming the go to destination for books and online shopping. The company is now the dominant name in ebooks, as well as a huge player in streaming video and music. More recently, Amazon has decided to break free from the tubes of the internet and make a splash in the physical realm with its own bookstores and its purchase of Whole Foods last year. But Amazon isn't stopping there. The Seattle-based company is now looking to add theaters to its list of offerings, as it is in the running to acquire Landmark Theaters.
According to Bloomberg, Amazon is one of several potential buyers for the company owned by Mark Cuban and Todd Wagner. Landmark Theater's owners have apparently been looking into a possible sale, and Amazon is one of the names in the running to buy the theater chain. As of right now, there are talks, but nothing is final. But should things become final and a lot of hurdles be jumped, Amazon would continue its push into the brick-and-mortar space with its very own theater chain that currently is comprised of 50 theaters in 27 markets and is known mostly for showing indie flicks and foreign films.
Amazon is already a huge content distributor and producer, so this would give the company another distribution channel, but one in the physical space with locations in major markets around the country. Amazon now has its own film studio, and with its own distribution network of theaters, Amazon Studios could get its original movies in theaters, getting them greater visibility and qualifying them for awards consideration, without needing to pay distribution fees to other exhibitors.
However, there is a rub to Amazon, which owns a movie and television studio, being able to also own a chain of theaters. During the Golden Age of Hollywood, the industry operated under the studio system, wherein primarily five major studios had a monopoly over distribution and controlled exhibition of their films. Under this model of vertical integration, theater chains might only show films made by the movie studio that owned them. So you would go to a Paramount theater for a Paramount film, for example. This model was struck down in the landmark 1948 Supreme Court Case U.S. v. Paramount Pictures. That decision, known as the Paramount Decree, led to the production, distribution and exhibition model we have today.
That brings us back to Amazon. As the owner of a movie studio, Amazon would theoretically be barred from owning its own theater chain. However, the Justice Department recently said that the decree, which turned 70 this year, may no longer be applicable or effective, and may be terminated. So it is possible that if Amazon does purchase Landmark Theaters, it could set a new paradigm.
In the past, Amazon has been more amenable than Netflix to theatrical runs prior to streaming for its original movies, but this would give the company distribution control at multiple levels. It makes sense that this would be the next logical step for the company, and Netflix seems to have had the same idea. As we have seen, Netflix and Amazon have both increased their original content offerings to reduce reliance on licensing content from other producers. In the world of streaming, you are increasingly seeing a focus on owning content and distribution, so it makes sense that the physical realm would be next.