Why Amazon is embracing theatrical releases

There is some evidence that a movie tends to perform better on streaming services if it first has a theatrical release.

That’s likely what Amazon is betting on with its decision to start releasing more movies in theaters.

Amazon.com Inc. plans to spend more than $1 billion a year to produce movies that it will release in theaters, according to people familiar with the company’s plans, the largest commitment to cinemas by an internet company.

The world’s largest online retailer aims to make between 12 and 15 movies annually that will get a theatrical release, said the people, who asked not to be identified because the company is still sorting through its strategy. Amazon will release a smaller number of films in theaters next year and increase its output over time. That number of releases puts it on on a par with major studios such as Paramount Pictures.