Amazon’s New Business: Making Movies

One of the largest web retailers on the planet, Amazon.com, has launched a film studio aimed at attracting aspiring filmmakers and screenwriters.

Through the aptly named Amazon Studios, Amazon is offering filmmakers and screenwriters a total of $2.7 million in compensation for the upcoming year if their projects are selected. The company has made an agreement with Warner Bros. Pictures to develop and distribute the top submissions and release them as mainstream pictures.

We are excited to introduce writers, filmmakers and movie lovers to Amazon Studios, Roy Price, Director of Digital Product Development, said in a statement. Full-length test movies will show stories up on their feet and attract helpful feedback at an early stage. We hope that Amazon Studios will help filmmakers experiment and collaborate and we look forward to developing hit movies.

The move seems to be a clear diverting path away from Amazon's core business. The Seattle, Wash.-based company has been called the online version of Wal-Mart, as it sells everything from DVDs to diapers.

It seems like a pet project. Internally it's not core to their business. Media is an important product category from a retail perspective. Maybe they believe they can leverage their user base and become the funnel of a new feature. I don't think this will impact core business to any measurable degree, said Colin Sebastian, analyst at Lazard Capital Markets.

Amazon has stated if a film makes $60 million at the box office, the original filmmaker or screenwriter will earn $400,000 bonus. If it's released as a theatrical film at all, they will receive compensation of $200,000. Amazon was not available to comment on the financial specifics of the new venture.

Additionally, Amazon says it will give aspiring filmmakers and screenwriters a chance for exposure. The submissions will be judged by a panel of film industry professionals. The company said if Warner Bros. does not agree to develop the film, Amazon will seek out other studio partners.

This is not the first time the company has gone outside its core business. It also offers enterprise customers a series of cloud computing products. With this new project, Sebastian says, the company is likely trying to leverage its active customer base in DVDs, media, books and music. He does not see it as anything bigger than a pet project.

It could have sprouted off one idea, they figured it wouldn't cost a lot and keeps people interested in the media category. I'm not sure it's going to lead to anything bigger than a new video platform a la YouTube, Sebastian said.

Tweet