Amazon Scopes Out Another Sector -- Movies
Amazon (NASDAQ: AMZN) is in the running to buy Landmark Theaters, a large, but not massive, theater company with branches all over the country.
In this Motley Fool Money clip, Motley Fool contributors Andy Cross and Jason Moser talk about how Amazon could lead some change in this sector, and how much they might end up paying for the theater company.
A full transcript follows the video.
More From The Motley Fool
This video was recorded on Aug. 17, 2018.
Chris Hill: Now that Amazon is in the movie production business, it looks like the movie theater business might be next. Reports out this week that Amazon is in the running to buy Landmark Theaters, a chain that operates in major markets like New York, Chicago, L.A., San Francisco, and across the river in Washington, D.C. Andy, maybe I shouldn't be surprised by this. But I'm a little surprised.
Andy Cross: You can never accuse Jeff Bezos of not looking forward into the future. Here's my take on this. I think, with potential changing regulatory landscape on studios potentially owning theaters and widening their distribution, Jeff Bezos and Amazon are saying, "Hey, listen, we have an opportunity to go after another distribution platform." Landmark specializes in the Indian foreign space, which we know that Amazon Prime videos have had a lot of success with. I think it's Jeff Bezos saying, "Hey, listen, this is another distribution platform for us. Let's get in before the studios start changing that landscape and buy up asset property for the cheap." And, by the way, Mark Cuban, who is a part owner of Landmark, is shopping the business around, too.
Jason Moser: A million different ways to think about what he might do with it. But if we just look at one of the biggest complaints for going to the movies today, it's the price. It costs an arm and a leg just to get through the door. I think what they really want to do is get those moviegoers through the door, so they can sell all the concessions. Concessions are where a lot of the money lies.
But to Andy's point, Amazon has built a reputation as a very credible content producer at this point. If you can find more ways to reach the consumer, that's certainly Jeff Bezos's general line of thinking.
Hill: When you look at Landmark, this is not a major chain. They've got some good markets they're in, but the amount of money that Amazon would pay would not be all that big. Maybe somewhere in the neighborhood of upwards of $100-150 million. That seems like pocket change.
I am a little concerned, though. In the wake of the Amazon acquisition of Whole Foods, will that overhaul the concession? Instead of popcorn, my options are going to be, like, cucumbers and celery sticks?
Cross: Mm, maybe, good point. You're not getting that buttery popcorn anymore, my friend. Those big, large Cokes for $10?
Moser: I mean, Milk Dudes don't have a shelf life. He's going to be thinking about it.
Ron Gross: I broke a tooth on a Milk Dud in a movie theater once.
Cross: You can't get those at Whole Foods.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Andy Cross has no position in any of the stocks mentioned. Chris Hill owns shares of Amazon. Jason Moser has no position in any of the stocks mentioned. Ron Gross owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.
