You could never accuse Jeff Bezos of being predictable.
The e-commerce giant he founded in 1994 is reportedly now in the running to buy Landmark Theaters, a movie theater chain that is partly owned by Mark Cuban, according to a Bloomberg report citing anonymous sources. The chain, which operates 53 cinemas in 27 markets including New York, Dallas, and San Francisco, has been looking for a buyer since at least April. Amazon declined to comment and Cuban did not immediately reply to a request for comment.
Some industry analysts, like D.A. Davidson's Tom Forte, believe the move makes sense for the company's overall strategy. "It checks a lot of boxes for Amazon," he tells Inc. "It advances the company's efforts in proprietary content. It would [also] vertically integrate Amazon's film efforts, so the company is both producing the content and showing it at theaters." Amazon could further showcase its rising advertising business, which has already grown into a multibillion dollar revenue stream, Forte argues.
Plus, Amazon already has experience distributing its own films. It has partnered with Lionsgate and Magnolia Pictures (also a Cuban-owned company) for theatrical releases like critically acclaimed Manchester by the Sea and I Am Not Your Negro. More recently, it went solo and tested the model from inception with Woody Allen's Wonder Wheel, an Amazon original movie, shown in AMC theaters.
Outside the realm of film, there's opportunity for integrations in its gaming business, potentially driving millions of Twitch users to a physical space by introducing a cinematic gaming experience. This is something Landmark already offers, according to its website. Finally, Forte notes that as the theater chain is spread out geographically, it could lend Amazon an opportunity to install more lockers and reduce shipping costs.
Others are more skeptical of the potential tie-up. Forrester Research's retail analyst Sucharita Kodali thinks the pairing would be an "odd mix."
"I don't know what Amazon would do with a theater chain," she says. "Theaters make most of their money on concessions like candy and popcorn. Would they sell 365 Everyday popcorn in a bag at the theaters?"
She says the company is "doing just fine" making, distributing, and finding eyeballs for its content. "Other than lowering the cost of content production even more, I'm not sure a theater group helps them in any way they need help," she adds.
The U.S. movie market is also peanuts compared to other industries Amazon has made an incursion. For example, the prescription drug market in the U.S. is a $300-billion opportunity. In comparison, the total U.S. box office ticket sales in 2017 hit a 25-year all-time low, collectively racking up a little over $11 billion.
Forte concedes that there are instances where Amazon chooses only to partner with brick-and-mortar stores rather than acquiring them. That's the case with Sears, which delivers and installs car tires bought on Amazon's e-commerce platform.
Still, Amazon snapping up Landmark Theaters or any other movie chain may not be such an implausible move. Remember the brick-and-mortar bookstores it helped put out of business only to then open up bookstores?