Cinema stocks jumped Thursday after a report said Apple plans to spend $1 billion a year on theatrical film releases.
The investment is part of the tech company’s efforts to raise its profile in Hollywood and lure subscribers to its streaming service, Apple TV+, Bloomberg reported, citing people familiar with the matter.
Typically, Apple has released films directly to its streaming platform or allowed limited runs in a small number of theaters for Academy Award eligibility. Apple recently won best picture for its film “CODA.”
The commitment to longer theatrical releases is a way for the company to appease talent, who want their projects on the big screen, and drum up awareness for its streaming platform, which is estimated to have between 20 million and 40 million users, much smaller than rivals Netflix and Disney+.
Cinemark jumped as much as 10% on the news, while IMAX and AMC rose about 4% and 5%, respectively.
Apple didn’t immediately respond to a request for comment.
Amazon made a similar commitment last November, promising to make between 12 and 15 movies for movie theaters each year.
Bloomberg’s report indicated that Martin Scorsese’s crime thriller “Killers of the Flower Moon,” Matthew Vaughn’s spy movie “Argylle” and Ridley Scott’s historical epic “Napoleon” are on the short list for these longer theatrical runs. No plans have been finalized, but these releases could remain in cinemas for at least a month. Last year, Apple TV+ became the first streaming service to win the Academy Award for best picture, with “Coda.”
In the wake of the pandemic, distributors shortened the theatrical release window to 45 days from from around 90 days. Some studios have deals with cinema chains that allow for shorter runs based on ticket sales. Then there are others, like Paramount and Skydance’s “Top Gun: Maverick,” which remained in theaters long after the 45-day time period.
Already, 2023 is expected to be a stronger year at the domestic box office, as production levels returned to normal in 2022, but word of Apple’s additional film commitments gives the industry another confidence boost.
–CNBC’s Kif Leswing contributed to this report.