Amazon (NASDAQ:AMZN) announced a significant expansion of its movie strategy on Tuesday, focusing on theatrical releases alongside streaming content. 

The company's Amazon MGM Studios will release 12 to 14 films in theaters in 2026 and potentially 16 films in 2027. Those films will spend 45 days in theaters before being available to consumers on a pay-per-view basis and later streaming on Prime Video.

The strategy marks a shift from Amazon's (NASDAQ:AMZN) previous approach, which involved releasing fewer films with shorter and less consistent theatrical runs. Analysts said the strategy is part of Amazon's (AMZN) effort to compete directly with traditional studios like Warner Bros (WBD), Paramount (PARA), Sony (SONY), Universal (CMCSA), and Disney (DIS) and establish itself as a major player in the theatrical film market. 

The company still has plans for an equal number of films produced exclusively for Prime Video, maintaining its focus on streaming while bolstering its presence in cinemas.

Despite the seemingly positive news, theater stocks traded lower on Tuesday. AMC Entertainment (AMC) was down 3.8%, while Cinemark Holdings (CNK) fell 2.2% and Marcus Corporation (MCS) peeled off 1.1%.