Amazon Studios Goes Into The Theatrical Film Biz

Amazon Studios says it’s moving into the movie business, with an interesting wrinkle: After a month or two, its theatrical releases will end up on Amazon’s Prime Instant Video.

Amazon will either produce the films or acquire them from independent filmmakers.

The news today comes amid a flurry of other recent newsy events at Amazon’s video business — no doubt grabbing attention for Prime and as a consequence, away from Netflix, which is still the pay service most synonymous with online video.

"We look forward to expanding our production efforts into feature films. Our goal is to create close to 12 movies a year with production starting later this year," stated Roy Price, vice president, Amazon Studios. In the statement, Amazon said its presence “will also benefit filmmakers, who too often struggle to mount fresh and daring stories that deserve an audience.”  

The Amazon Original Movies creative development will be led by independent filmmaker Ted Hope, who co-founded Good Machine, which produced “Crouching Tiger, Hidden Dragon,” among other films, all of them more arty endeavors than ones with huge, obvious mass appeal. Coincidentally, Netflix announced it will produce a sequel to that movie for that 2000 movie to debut on the pay service in August at the same time it begins screening at Imax theaters.



Of course, a theatrical film that is quickly released to the on-demand window is often considered a failure, or else it would still be playing at the neighborhood Cineplex 2,000. Usually they don’t get to the DVD and pay windows for months, or up to a year, after their original release. But major movie studios don’t have pay services, at least not ones that operate as joint units where the ultimate goal is to make most of their money on the ancillary market.

With the Amazon set-up it would seem the secondary market is really the primary market.

It begs the question: How many filmgoers will buy a ticket to a movie theater to see something they would be able to see on their television set a month later — for the fraction of the cost? Better yet, which movie theater operators would want to get involved, even with a small movie from which there’s not much chance the potential audience would have been large to start with?

The answer is, that's the exhibition environment already. Small movies play for short periods of time and don't necessarily even make it to mid-sized markets.  

Last year wasn’t particularly boffo at the Bijou. Box office receipts were $10.35 billion, off 5.2% from the year before, domestically. And, as Variety reported, “there are troubling signs that moviegoers, particularly younger ones, are more reticent about making the trek to multiplexes. Americans aged 12 to 24 saw 15% fewer films in theaters during the first three quarters of the year, according to Nielsen. And in 2013, according to a Motion Picture Association of America report, the number of frequent moviegoers between the ages of 18 to 24 fell by a record 17%.” 

Blame it on all those devices and video alternatives, which is where Amazon is now pointing. If the Amazon shopping service has changed the way brick and mortar retailers operate, why not believe the movie theater at the mall is the next target to be disrupted?

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