Amazon (NASDAQ: AMZN) has begun preliminary talks to acquire Landmark Cinema. Amazon may be competing for the company with other potential buyers.
Landmark Theaters, founded in 1974, claims to be the largest domestic movie chain focused on independent cinema. Wagner/Cuban Companies, a media company founded by billionaires Mark Cuban and Todd Wagner, owns Landmark Cinema, along with other holdings in film production, distribution, home entertainment, and television syndication.
As no deal has been reached, there is a chance that the talks could fall apart. Although the acquisition price would likely be small, the acquisition of Landmark Theaters would give Amazon access to independent and foreign films and more than 50 theaters in 27 markets, including some high-profile locations in NY, Philadelphia, Chicago, LA, and SF. Landmark Theaters are also known for art-house fair and high-end amenities like coffee bars and lounges, distinguishing it from the typical movie experience.
Amazon's purchase of Landmark would also be a sign of good health for the movie theater industry. Theater operators have experienced considerable pressure in recent years as the popularity of Netflix (NASDAQ: NFLX) and other online streaming services (including Amazon's) have made consumers less likely to go out to theaters. But now that Amazon is looking to enter the industry itself, some of these worries have been alleviated. Investors also accepted this news positively, seeing it as a sign that Amazon is not looking to disrupt moviegoing but to support the theater experience.
Netflix could also be one of the potential buyers and would be looking to acquire Landmark for the same reason as Amazon: to get a broader distribution of film content. Other cinema chains, like AMC (NYSE: AMC) and Cinemark Holdings (NYSE: CNK), fell at the news.