• by Thom Forbes  @tforbes, January 20, 2015

Amazon said yesterday that it would produce about a dozen movies a year for theaters that it will then release to its Amazon Prime subscribers a mere month or two later, upending the traditional Hollywood window of 39 to 52 weeks from larger than life to streaming device.

Amazon Original Movies will focus on “indie” movies with budgets of between $5 million and $25 million, spokeswoman Sally Fouts tells Reuters’ Shubhankar Chakravorty and Christian Plumb. “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,” they write.

But making money is not Amazon’s immediate goal with any one particular service, of course — in fact, “most of its other ventures are ultimately aimed at bolstering its underlying retail business,” Chakravorty and Plumb point out.

“Amazon Original Movies will be run by celebrated independent movie producer Ted Hope — who worked on ‘21 Grams,’ ‘Martha Marcy May Marlene,’ ‘The Ice Storm,’ and other critically acclaimed indie hits — so there's reason to be optimistic that the company will have high quality control (or, like its television content, at least a few diamonds in the rough),” writes Gizmodo’s Kate Knibbs.

“Audiences already recognize that Amazon has raised the bar with productions in the episodic realm, tackling bold material in unique ways and collaborating with top talent, both established and emerging,” Hope said in a statement announcing the project. “To help carry the torch into the feature film world for such an innovative company is a tremendous opportunity and responsibility.” 

The new division will be run out of Amazon Studios, which the company launched in late 2010 by inviting “anyone” to “upload a script online” and promising to “read and review all submissions.” 

“Monday's announcement is a significant strategy shift,” writes Mashable’s Josh Dickey, “from dabbling in script development to a commitment to getting cameras rolling.”

BTIG Research analyst Rich Greenfield tells the New York Times’ Emily Steel that Amazon’s move adds to the pressure on traditional business models and gives consumers more of what they want: “In 2015, consumers don’t understand why there is an exceedingly wide gap between seeing a movie in a theater [and] seeing a movie at home.” 

Theater chain executives, of course, have an entirely different perspective. 

“In September, Netflix and The Weinstein Co. announced a deal to produce a sequel, ‘Crouching Tiger, Hidden Dragon: The Green Legend,’ for release in IMAX theaters and on Netflix on the same day,” writes Ellen Killoran on Forbes.com. “In response, top U.S theater chains including Regal and AMC said they would not screen the movie. 

The WSJ’s Steel reports that “Amazon did not respond to questions on whether the company has tried to negotiate deals with any theater chains for shorter theatrical runs.” A spokesperson for the National Association of Theatre Owners tellsVariety’s Todd Spangler: “The decision about what windows are appropriate, and when movies will be played theatrically are made by individual theater companies according to their own policies.”

As USA Today’s Michael Wolff points out in writing about Amazon winning a Golden Globe Award last week for its series “Transparent” and also signing Woody Allen to a development deal for an original series, TV has been eclipsing movies in quality storytelling.

“As a matter of fact, it is the movies now that seem like a ho-hum commercial backwater of predictable sequels and franchises,” he wrote Sunday before the Amazon Original Movies announcement. “The true medium for actors and writers is television.” 

The best TV, in fact, is good enough that people are willing to pay for it. And in the process, the new bundles of bingeable original programming from the likes of Amazon Prime and Netflix is upending the traditional model of “advertising dollars that demanded mass market audiences, and encouraged safe and bland product.” 

“The winning hand held by streaming services is that they have a wealth of very precise data on what people watch, which stars they seek out, and when they turn off,” observes CNET’s Rich Trenholm. “Particularly in the case of Netflix, that's a hugely powerful secret weapon, allowing the streaming service to order the full series of ‘House of Cards’ and the like while TV networks hedge their bets by trying out a pilot.”

Now Amazon is all in, too.