What Does Amazon Studios Mean for Hollywood?

This week, corporate juggernaut Amazon.com announced it would be producing feature films for theatrical release, a huge if not all-that surprising move for the company and its ambitious leader, Jeff Bezos. With Ted Hope as its creative chief, Amazon Original Movies plans to release up to a dozen features a year, making it a perfect case study for any producing student. In many ways, it’s a match made in heaven—Ted Hope is a wildly successful indie producer who also delivered a guest lecture at the New York Film Academy, and Amazon has a very popular streaming service that can distribute the films to homes after their big-screen runs. While movies traditionally took several months to transition to home video, and more recently, up to a year to streaming services, Amazon can have its movies prepped and ready to stream on Prime Instant Video a month or two after their initial release.

Pitches & Pilots

While their announcement that they’ll be producing their own movies is huge, Amazon Studios itself is nothing new. It actually launched in 2010 as an online platform to develop and crowdsource original content. Amazon made a loud call for aspiring writers, directors, animators, editors, storyboard artists and other artists to come together and make movies. Writers could submit spec scripts, treatments and pitches, and by doing so, automatically option their work to Amazon for free. Amazon instantly made these works public and anyone else was allowed to tweak or completely rewrite these works. If the end result was strong enough, Amazon would package and sell the project with a set commission for the original creator as well as anyone who worked on the successful draft.

This system was both innovative and controversial. Many writers claimed the company was taking advantage of artists who had no power and not many options. In many ways they were right, but it also offered opportunities to artists who felt they had nowhere left to turn. Amazon also held contests with large financial prizes as incentive for filmmakers to willingly give up the rights to their work. While Amazon Studios had a buzzy beginning, receiving and crowdsourcing thousands of spec scripts, it never really shook Hollywood in the way many insiders expected.

In retrospect, Amazon Studios may have just been a first step in a long-term plan Bezos had in his head all along. Amazon eventually started focusing its crowdsourcing on television pilots, and in 2012 began production on a slew of original pilots it planned to stream on its still-nascent Prime Streaming. While most of these pilots were from established writers, directors and actors as opposed to the undiscovered talent its Studios originally sought to promote, it was still a big step both for the company and Hollywood. Amazon’s Prime streaming service had finally come-of-age and established it as a firm and equal competitor of Netflix. Its initial pilot season was successful and Amazon has continued to release original content in televised form, winning critical praise and Golden Globes.

From Small Screens to Big

With its foray into TV a definitive win, it’s only logical for Amazon to try its hand at feature films. By self-producing content, it not only makes the question and price of streaming rights a nonissue, but allows the company to get the content into homes as quick as possible, a genuine advantage in an socioeconomic climate where many Americans would rather watch new films at home than at the movies. While Amazon could theoretically release the film day-and-date with theaters, giving consumers the option to stream a new release immediately, it has opted for a 4-8 week delay.

This may seem counterproductive to their interests, but is a shrewd move and could end up reaping big rewards. Netflix, Amazon’s biggest streaming competitor, has also announced its plan to produce its own movies to distribute, also following its success in self-producing television content. However, unlike Amazon, Netflix plans to release its movies, including four Adam Sandler features and a sequel to Crouching Tiger, Hidden Dragon, the same day as their theatrical releases. After all, Netflix has the most to gain from streaming a brand new movie.

But theater owners disagree, and are still a powerful force to reckon with in Hollywood. They have been fighting instant on-demand tooth-and-nail as it obviously hurts box office and their own profit margin. Many have threatened Netflix that they would not screen their productions in protest. While this could cost the theater chains money, they have many other movies they can show, and it will hurt Netflix’s potential income on its produced content. Since Amazon is giving theaters a month or two head start to play their films for an audience unwilling to wait for it on demand, theaters will more likely show their films on more screens, making bigger profits for both parties.

The Reign of the Movie Studios

Amazon’s deal with the theater chains could give it a big edge on Netflix and position the company to become a powerful studio in Hollywood. But it will take a lot of luck and smart business for it to stand with the giants of Hollywood—the major studios. Almost all of the films to come out of the Golden Age of Hollywood came from five major studios and a few smaller ones. Today, the majority of content to hit the big screens still only come from the Big Six, three of which were part of the original Big Five—Warner Brothers, 20th Century Fox and Paramount. Universal and Columbia have grown from that era as well, with only Disney being the relative newcomer in the pack.

Indie films are considered independent because they are not produced by these major studios (though the studios’ power is so broad they may end up distributing independent productions.) These studios are nearly as old as Hollywood itself, forming a powerful dynasty that has been nearly impossible to shake. Some production companies have come close, taking a sizable portion of the market, though they still are dwarfed by the Big Six. These include Lions Gate, MGM (a former Big Fiver), CBS, and Dreamworks, which was created by the some of the most powerful men in Hollywood, like Steven Spielberg. But even with history, popularity, insider knowhow and a lot of money on their sides, they haven’t challenged the major studios in a revolutionary way.

So the question is, if Amazon Studios keeps to its plan and starts producing films, can it reach the level of Lions Gate or Dreamworks? An even bolder question is: Can it join the Big Six?

Is Amazon the Next Major Studio?

As long as Amazon keeps up with its plan, it’s more than likely to become at least a minor contender in Hollywood. Its foray into television has proven that it has both the creative and financial prowess to handle original content. Cracking the Big Six is a very big deal. Only Disney has been able to do so in almost a century of Hollywood business and politics, building its empire on an ambitious founder and a lovable cartoon mouse.

Amazon doesn’t have Mickey, but it does have Jeff Bezos, who has shown at every chance that he is as ambitious as Walt Disney. Bezos and his company also have billions of dollars, from a wide-ranging empire. Netflix might be the bigger streamer, but it doesn’t come close to Amazon in income. Practically no corporation does. When Bezos sets his mind to something, he usually becomes an unstoppable force with unlimited resources driven toward that goal. Under his guidance, Amazon has practically invented modern online shopping and revolutionized reading and the literary industry with ebooks and the Kindle. If there’s a company that can transform Hollywood permanently, it’s Amazon.

Then again, there’s the Fire Phone. Sometimes Amazon doesn’t get it right. But while the Big Six have been dominant for decades upon decades, the medium has more-or-less been the same the entire time. We’re living in a new millennium, in a new world. 20th Century Fox and its brethren may have been the rulers of the 20th century, but the 21st century may end up belonging to forward thinkers like Bezos, and innovative mega juggernauts like Amazon.

What Does Amazon Studios Mean for Hollywood? by