Amazon Studios' Movie Push: Another Blow to Theater Owners

Roy Price Ted Hope Split - H 2015
Newscom; Getty Images

Roy Price Ted Hope Split - H 2015

The company's plan to produce and acquire 12 movies a year also gives the e-tailer entry to the film-festival circuit.

This story first appeared in the Jan. 30 issue of The Hollywood Reporter magazine.

Amazon is beefing up its movie business. Led by independent film guru Ted Hope, Amazon Original Movies plans to produce and acquire 12 movies a year that will stream on Amazon Prime four to eight weeks after their theatrical debut. Moving into this space gives the e-tailer entry to the film-festival circuit, where it can gain artistic credibility through niche acquisitions and drive more subscribers to the $99-a-year Prime service, still best known for its free shipping. "Amazon believes they will gain more in Prime subscriptions and recognition as a content producer than they will give up in electronic sell-through and VOD revenue," says IBB Consulting partner Jonathan Weitz. "They are looking at the benefit of exclusive content from their produced shows and applying that logic to movies."

Theater owners probably will not be much happier with Amazon's shortened windows than they were with rival Netflix, which infuriated exhibitors in September with its plan to release a Crouching Tiger, Hidden Dragon sequel simultaneously online and in Imax. But it might not matter if Amazon plans to release its titles only in select cinemas, in the vein of such indie distributors as Radius-TWC, IFC Films and Roadside Attractions. Amazon Studios vp Roy Price says he is targeting indie movies with budgets in the $5 million to $25 million range, but otherwise the company declined to say how wide a theatrical footprint it will seek. BTIG analyst Richard Greenfield says the addition of Amazon Studios as a digital player is a sign theater owners have become "extremely consumer-unfriendly," adding, "They can try to slow technology to force consumers to pay for overpriced popcorn, but in the end, they will be the losers, not the studios."