Why Amazon might want to go after Landmark Theaters

Amazon.com is reportedly interested in buying Landmark Theaters, one of the country's largest chains, as it expands into the entertainment business while continuing to dominate both e-commerce and cloud computing.

According to Bloomberg News, the Seattle-based e-commerce giant is vying with other suitors for the chain, which is owned by Cuban/Wagner, a venture backed by billionaire "Shark Tank" star Mark Cuban and Todd Wagner. Landmark has  retained investment bank Stephens as a financial advisor and hasn't made any decision on a sale, the news service said. Officials from Amazon and Landmark Theaters couldn't be immediately reached for comment.

Acquiring Landmark, which has 52 theaters specializing in arthouse fare in 27 markets, underscores the growing importance that Amazon.com has placed on original content. It's a major component of Amazon Prime, though analysts say most customers sign up for the $119-per year service for its free 2-day shipping. Amazon, though, has gotten critical acclaim for Amazon Prime shows such as "Transparent" and "The Marvelous Mrs. Maisel" and like its rivals Netflix and Hulu it's planning to ramp up spending to lure more viewers to its site.

"This is probably a move to get broader distribution of film content," Leo Kulp, an analyst with RBC Capital Markets, told Bloomberg. "Netflix had been discussed as a potential buyer of Landmark for a similar reason."

A forecast released earlier this year by JPMorgan analyst Doug Anmuth estimated Amazon spent $5 billion on original content and sports rights this year, p from the more than $4 billion it shelled out a year earlier. Netflix, the most popular video streaming service, is expected to spend as much as $13 billion in 2018 on shows only available to subscribers. Legacy media companies have more modest ambitions. AT&T's HBO reportedly paid $2.5 billion on content in 2017. Walt Disney's ABC and CBS, the parent of CBSNews.com, reportedly each spent about $4 billion.

Amazon has also made inroads in the film business through its Amazon Studios, which was founded in 2010. The company's "Manchester by the Sea" drama scored Oscar wins last year for Best Actor and Best Original Screenplay. It was the first film from a streaming service be nominated for a Best Picture Oscar, though the honor ultimately went to "Moonlight." "The Big Sick", an independent film from Judd Apatow that Amazon distributed, was nominated in 2018 for an Oscar for Best Original Screenplay.

If the Landmark deal happens, it would be just the latest chapter of Amazon's expansion out of the digital world. The company last year acquired the upscale grocery chain Whole Foods for $13.7 billion and has opened a handful of physical book stores.

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