Amazon looks to leap from computer screen to silver screen

20 Jan 2015 | Author: | No comments yet »

Amazon dives into film — and you’ll see it soon.

Amazon said on Monday it was aiming to produce close to 12 movies a year for theatrical release which would then be available on its Prime video service within two months, significantly faster than the roughly one-year wait it normally faces to stream Hollywood releases. “Amazon expects to focus on ‘indie’ movies with budgets of between $5 million and $25 million,” spokeswoman Sally Fouts said. Amazon has taken a big step forward into the world of Hollywood, with plans to create 12 feature films a year that will be released first in movie theaters and then, weeks later, streamed to customers online.

While modest compared with Hollywood blockbusters, the move will add to already hefty spending at Amazon, potentially unnerving investors concerned about the company’s lack of profitability. “Such films have proved challenging even for major Hollywood studios such as Paramount and Warner Brothers, which have bowed out of the business in recent years,” said Jeff Bock, Box office analyst at Exhibitor Relations. “It’s a tough, tough racket to play consistently,” he said, pointing to the difficulty of getting good content and the competition for quality productions at festivals like Sundance. Amazon Studios is fresh off the success of series “Transparent” at the Golden Globes, winning best comedy, and its deal with Woody Allen to produce a new streaming series — accomplishments that have drawn comparisons to online giant Netflix. Both online firms have become stronger rivals to Hollywood studios and television networks, with their growth in subscribers and ability to fund dozens of new projects.

It remains unclear whether Amazon believes the movie business can make money on its own, but most of its other ventures are ultimately aimed at bolstering its underlying retail business. Still, it threatens to worsen Chief Executive Bezos’ tense relationship with Wall Street, which has grown increasingly vexed over his heavy spending that has spurred big losses in recent quarters. Its movie-production gamble ups the ante for Netflix, which said in September it would jointly produce a sequel to “Crouching Tiger, Hidden Dragon” and in October signed a deal for comedian Adam Sandler to star in and produce four films to be shown exclusively on the service. One or two months after theatrical release, the films will be exclusively provided to Amazon Prime Instant Video customers. “We look forward to expanding our production efforts into feature films,” said Roy Price, vice president of Amazon Studios. “Not only will we bring Prime Instant Video customers exciting, unique and exclusive films soon after a movie’s theatrical run, but we hope this program will also benefit filmmakers, who too often struggle to mount fresh and daring stories that deserve an audience.” Amazon viewers will see the films much sooner than the typical cycle of releases to DVDs, cable on-demand and then streaming service providers, Price said. Sony Pictures’ recent success in releasing its comedy “The Interview” through video-on-demand services after threats from hackers was also seen as a blow to big-screen businesses. “That verbiage probably scares theatre owners,” Bock said, referring to Amazons’ plan to narrow the window between theatrical releases and streaming availability, adding that the theatre chains could take some solace in Amazon’s decision not to go for simultaneous release or just putting films straight out on video.

It makes the earlier distribution on Amazon’s home delivery service, opposed by theater owners, “an easier pill to swallow,” he says. “Maybe this is the way to bridge this distribution gap,” says Bock. “It will be interesting to see how this plays out. National Association of Theatre Owners vice president Patrick Corcoran declined to comment on Amazon’s move but said the time between theatrical and home video release would play into theatres’ decision on whether to take a particular film. Right now, they are another player in a tough marketplace.” The original movies initiative will be led by indie-film veteran Ted Hope, who co-founded and ran Good Machine, the production company behind Eat Drink Man Woman and Crouching Tiger. Amazon may have decided to target theatrical releases rather than pushing movies straight to Prime because big name talent still associates paying ticketholders with prestige, said Phil Contrino, chief analyst at Boxoffice.com. “At the end of the day a theatrical release still generates a lot of publicity, it gets a movie reviewed—every person that goes to watch that movie is paying for it,” he said.

When Sony Pictures Entertainment’s released “The Interview” last month in theaters and online at the same time, the theater-owners group said the studio probably didn’t make up for the cost of the film because it only played in a small number of theaters. The company spent an estimated $2 billion on content in 2014 with about $200 million of that used to develop original shows, according to Wedbush Securities analysts.

Such projects include “Mozart in the Jungle” and the multi-Golden Globe Award-winning “Transparent”. “The Golden Globes, they got that, now the next step is Oscar nominations,” Bock said, adding that only theatrically released movies are eligible for Hollywood’s biggest award.

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