Amazon doesn't just stream movies, it makes movies

Metaratings
21 Jan 2015
00:00
Article

ITEM: Not content to be in the streaming movie business, Amazon says it will be getting into the streaming movie production business.

Amazon Studios announced earlier this week that starting this year, it will start producing and acquiring original movies for theatrical release. More interesting, however, is the fact that the same plan includes a shortened distribution window to bring the same films to its SVOD service, Amazon Prime Instant Video.

That means theatrical films produced by Amazon Studios – which already produces television series such as Transparent – will be available for streaming within 30 to 60 days, rather that the usual 39 to 52 week window.

Amazon Studios VP Roy Price says the company aims to make up to a dozen films starting this year. Amazon Original Movies creative development will be led by Ted Hope, who co-founded and ran production company Good Machine, whose roster includes Ang Lee films Eat Drink Man Woman and Crouching Tiger, Hidden Dragon.

That shortened SVOD release window may be a boon for movie fans who don’t want to wait a whole year to stream films to their tablet – which in turn could also boost subscriptions to Amazon Prime, according to the Wall Street Journal:

Prime members may spend up to four times as much on Amazon as non-Prime members, estimates Piper Jaffray’s Gene Munster. He said the program now has about 40 million members.“Cinema chain owners are notoriously sensitive about people screwing around with release windows or releasing stuff too close to when they’re available in cinemas themselves,” [Barton] says. “Otherwise they just won’t show your film. It doesn’t matter if you’re Sony Pictures or Amazon, they’ll just say no.”

On the other hand, the smaller streaming window also poses a potential problem for the theatrical side of the distribution equation, according to Ed Barton Head of TV and principal analyst at Ovum, reports IPTV News:

Prime members may spend up to four times as much on Amazon as non-Prime members, estimates Piper Jaffray’s Gene Munster. He said the program now has about 40 million members.“Cinema chain owners are notoriously sensitive about people screwing around with release windows or releasing stuff too close to when they’re available in cinemas themselves,” [Barton] says. “Otherwise they just won’t show your film. It doesn’t matter if you’re Sony Pictures or Amazon, they’ll just say no.”

Indeed, Netflix found that out the hard way last year when it announced it would stream Yuen Wo-Ping’s sequel to Crouching Tiger, Hidden Dragon the same day it was released in select IMAX theaters. Theatre chain Regal Cinemas said it would refuse to carry the film altogether rather than “participate in an experiment where you can see the same product on screens varying from three stories tall to 3 inches wide on a smartphone.”

Considering how tough the movie business is even for seasoned Hollywood studios (albeit not so tough that the industry is struggling to get by – quite the opposite, in fact), Amazon is likely to have its work cut out for it.

But then long-form content like feature films – as well as mid-form content like TV shows – is where the money is in the online video biz, according to a report released last week by ABI Research, which says the online video market will top $56 billion in revenues by 2019.

While the ABI report says short-form snackable content (i.e. professionally generated content, not people dumping buckets of ice water on themselves for charity) will grow to be a $13 billion market by 2019, its share of the overall market will actually shrink compared to mid- and long-form content, which will drive the market with stronger revenue growth via OTT services like Netflix and Hulu that often generate more revenue per play.

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