How to Make Money Off Amazon's Little-Known Video Service

Courtesy of Glass House Distribution
'Dropping the Soap'

Jane Lynch won an Emmy last month for her role in a soap opera satire that's part of the e-commerce giant's self-service Amazon Video Direct.

When Jane Lynch took home a shortform Emmy on Sept. 10 for her performance in soap opera satire Dropping the Soap, she shed light on an under-the-radar program at Amazon that is driving audiences to projects that would normally get lost in the glut of video available online.

Amazon Video Direct, a self-service program where anyone can upload a video and make money off of its distribution, is giving a number of filmmakers and digital companies access to the same audiences watching Transparent or The Man in the High Castle. In the 16 months since its launch, the program has paid out "tens of millions" to its partners, executives say, as it has caught on with such firms as Funny or Die and several dozen indie filmmakers.

Amazon Video director Eric Orme says the program has led to "billions of minutes" of video streamed. "We have seen large engagement and providers are reacting to that," he added. "We're seeing more and more providers coming on [to the program],"

Partners can release projects via Amazon Prime, sell them through a stand-alone subscription, charge for rental or purchase, or offer them free with ads. Terms vary based on the release strategy, but in general, Amazon pays U.S. partners either 15 cents per hour streamed or 50 percent of revenue generated. And there are bonuses awarded to creators who participate in AVD's Film Festival Stars program, in which indie filmmakers can earn up to $100,000 in upfront cash for premiering their films on Amazon. To date, the program has paid $3.75 million for exclusive streaming rights to more than 75 films.

AVD is one of several programs that Amazon now runs for video partners. Its Amazon Channels program allows people to sign up for subscriptions from HBO, Acorn TV and others through their Prime accounts. And through Amazon Studios, the e-commerce giant produces original television series and movies. 

The appeal for many is the scale of Amazon Prime. The company doesn't disclose how many people pay $99 per year for Prime, which is primarily used for free two-day shipping, but estimates peg the base at around 80 million in the U.S. alone. "It was most important to get the show out there and get eyeballs on it," says Dropping the Soap creator Paul Witten. "It gives us so much access to customers, because most people — at least in my circles — already have Amazon Prime."

Amazon's recommendation algorithm will surface projects distributed via AVD based on a person's viewing history. "We have a lot of experience in personalization," says Orme. "Our algorithms are always looking to match content up with the right audience." 

For Funny or Die, which has made Amazon one of the primary distribution platforms (outside of its own website) for its digital videos, it was attractive that projects would live alongside fare typically found on TV. The company was impressed with early results on such video compilations as "The Very Best of Will Ferrell" that it even released web series The Real Stephen Blatt starring Justin Long on Amazon (and not its own site) in July. "It's all about the way the content is experienced," says Funny or Die vp partner content Brian Toombs. "It's behind the paywall, so it feels premium in nature."

A version of this story first appeared in the Oct. 4 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.