Amazon Studios Looks to Shake Up the Movie Business as it Moves Into Self-Distribution

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Amazon may be a new-media innovator, but when it comes to making movies, the company isn’t selling itself as a barricade-breaching revolutionary. Unlike its rival, Netflix, which debuts its films on its streaming service and largely forgoes a theatrical run, Amazon is all about releasing its offerings in cinemas.

“Our entry into the market is not particularly disruptive,” says Jason Ropell, worldwide head of Amazon’s motion picture group, as he sips black coffee at the Ritz-Carlton in Toronto, where his company’s Ben Stiller dramedy “Brad’s Status” is premiering at the film festival. “We’re a theatrical company that supports a theatrical window. We have home entertainment sales. In many ways we’re operating like a traditional studio.”

Instead of burning down the customary system of releasing movies, Amazon is ready to become a full-fledged studio, equipped to handle every step in the life span of the films it creates and acquires. In the past, Amazon partnered with the likes of indie distributors Roadside Attractions, Bleecker Street and Lionsgate to support the rollout of its movies in theaters. But starting with Woody Allen’s “Wonder Wheel” in December, Amazon will begin distributing its own films and overseeing all parts of their theatrical campaigns. Among the upcoming pictures it will self-release: Lynne Ramsay’s thriller “You Were Never Really Here,” Luca Guadagnino’s horror remake “Suspiria” and Gus Van Sant’s drama “Don’t Worry, He Won’t Get Far on Foot.”

“It represents the final stages of the evolution of our strategy,” says Ropell. “It completes the picture in terms of our ability to control a film from its inception to how it comes to customers.”

That’s required staffing up substantially. The company’s marketing and distribution team, headed by Bob Berney, now tops out at 40 people, quadruple what it was a year ago. It’s also hired Mark Boxer, an IFC executive best known for his work on Richard Linklater’s Oscar-winning “Boyhood,” as head of theatrical distribution. The company believes that distributing its own films will help with branding as well as cut costs.

One thing that will not change is the emphasis on having films screen in theaters. Amazon believes that showing a move on the big screen gives it a patina of respectability, and the publicity that comes with having its talent do interviews and appear on shows draws attention to the company’s Prime streaming service.

Courtesy of Amazon Studios/Jessica Miglio

“We found that the customers want quality films, but also films that they’ve heard about and perceive as big events, because they’ve been reviewed in newspapers, screened at festivals and had long-running theatrical engagements,” Berney says.

When Amazon first made noise about making movies, studio executives expected the company would take a page from the Netflix playbook and focus on driving customers to its streaming service, just as its sprawling e-commerce platform had encouraged an earlier generation of customers to order their paper products online instead of trucking down to a brick-and-mortar store. Instead, Amazon has fully embraced a more conventional approach to releasing its films and has had little appetite for positioning itself as a market disruptor like Netflix. That’s not to say that what it’s doing isn’t innovative.

“Their agenda is complex,” says sales agent John Sloss, founder of Cinetic Media. “I increasingly believe that the future belongs to people who will not live or die by the performance of the individual pieces of content. Instead they will have something of a double bottom line where there will be collateral benefits that come from their content.”

Amazon isn’t in the movie business to make money from box office returns and home entertainment sales, though it does both. Nor is it purely a subscription-based service in the vein of Hulu or Netflix, though it is that too. It’s primarily interested in offering movies to the people who pay $8.99 a month for its Prime shipping service. In addition to getting packages quicker, Prime users can stream movies like “Manchester by the Sea” or “The Big Sick.”

“Amazon is using movies to drive people into its great virtual shopping store and to keep them on its site longer so they buy more stuff,” says Peter Csathy, founder of Creatv Media, a business and consulting firm.

In the fast-moving movie business — one with a high fatality rate, where companies launch and shutter with dizzying speed — Amazon is looking downright geriatric. In the three years since it entered the scene, the constellation of companies on the prowl for films to release has altered dramatically. As indie studios like Relativity Media, Broad Green and Alchemy close their doors or dial down their ambitions, they’ve been replaced by an onslaught of digital players looking to buy movies. Apple, YouTube Red and Facebook have hit up festivals, kicking the tires on projects that might excite their customers.

Despite the wave of Silicon Valley types riding into Hollywood, Ropell insists that Amazon isn’t going to deviate from its game plan. “It doesn’t change our strategy,” he says. “We’re not a competitor-focused company in any of our businesses. Strategically speaking, we don’t change what we do based on who might be coming into
the space.”

In interviews and public statements, Netflix has been disdainful of the theatrical movie business and critical of Amazon. Last spring, Netflix CEO Reed Hastings quipped that the only innovation cinemas had made was to offer better-tasting popcorn, while chief content officer Ted Sarandos told Variety last month that Amazon’s emphasis on theatrical releasing was puzzling. “I don’t understand why perpetuating a model that feels more and more disconnected with the population is good,” he said.

Amazon doesn’t have Netflix’s sharp elbows. Likewise, Berney, a bookish sort who exudes affability, isn’t eager to get into a battle of put-downs with its streaming rival. “They can take their swipes, but it’s more about showing that our model is actually working,” he says. “We’ve done that.”

“They’ve done some great projects,” Berney adds, complimenting Netflix. “They have their own very religious philosophy that everything just goes online. I think that our approach is working. It enhances and incentivizes artists globally, and that encourages filmmakers to come work with us.”

Since it started releasing movies in 2015, kicking things off with Spike Lee’s “Chi-Raq,” Amazon has primarily backed director-driven projects that appeal to art-house crowds and attract awards attention. Last year, Amazon’s movies won three Oscars, for “Manchester by the Sea” and Asghar Farhadi’s “The Salesman,” and the company is planning awards campaigns for “The Big Sick,” its surprise summer hit, and upcoming films such as Todd Haynes’ “Wonderstruck,” Linklater’s “Last Flag Flying” and Allen’s “Wonder Wheel.” Going forward, it plans to release between 12 to 14 films a year with budgets ranging from $5 million to $35 million.

“The idea of nurturing talent or working with the masters comes from the older studio system,” Berney says. “But I think we’re a little more filmmaker friendly. Studios tend to have one way they do everything every single time. We’re going to try to maintain a handcrafted, artisanal way of doing each film.”

We’re going to try to maintain a handcrafted, artisanal way of doing each film.”

Bob Berney

Amazon is also moving more heavily into developing its own projects in-house, as opposed to relying solely on picking up films at Sundance, Cannes and other festivals. “Wonderstruck” and “Wonder Wheel” are Amazon productions, for instance, and the company expects that going forward, fewer than half of its movies will be acquisitions. To augment its slate, the company has been signing development deals with the likes of “Carol” producer Killer Films and Casey Affleck’s Sea Change Media. That’s a vestige of traditional studios, which keep top producers on their lot (except in this case, there’s no physical studio lot).

“Filmmakers want to go where they feel their work is respected and where a company has the resources to deliver on their vision,” says Christine Vachon, the founder of Killer Films. “Amazon is delivering on all counts.”

Amazon has been a boon to art-house auteurs. With major studios steering clear of mid-budget dramas in favor of superhero fare, the company has helped fill a void. It’s given Allen his biggest budgets in decades. In “Wonder Wheel,” the director even used CGI to help create 1950s Coney Island. The film’s production budget was in the $20 million range.

“Amazon enabled that film to have a bigger look than some of his other films,” says Berney.

“Wonder Wheel” marks Allen’s third project with the company, following 2016’s “Café Society” and his television series “Crisis in Six Scenes.” In a statement to Variety, the director praises the company. “Working with Amazon has been a pleasure because they’re very sensitive to the needs of the artist,” he says. “That’s worth its weight in gold and is a rarity in this business.”

While Amazon’s focus remains on indie fare from the Richard Linklaters and Woody Allens of the world, the company has been broadening the types of projects it makes. It’s partnering with Warner Bros. on a big-screen adaptation of Donna Tartt’s “The Goldfinch,” a project it joined after seeing how popular the book was with Amazon customers. It has also met with MGM and producer Barbara Broccoli, guardians of the James Bond franchise, to discuss working on the next 007 adventure, according to insiders. Amazon won’t comment on those talks, though Ropell hints that the company isn’t ruling out playing in the blockbuster arena. “We remain open to and very interested in exploring all opportunities and projects of all scales as the movies program continues to grow and evolve,” he says.

Berney and Ropell make the decisions on which films to back, along with Roy Price, head of Amazon Studios, and Ted Hope, the production chief. Amazon founder Jeff Bezos remains “engaged,” Ropell says, but doesn’t call the shots on greenlighting.

Amazon, like Netflix, has one key advantage over the competition: It has a wealth of information about what its estimated 65 million Prime members worldwide want, buy and browse. Traditional studios would kill for that kind of insight. Yet, Amazon’s film executives say that while data guides decisions, they’re not relying solely on algorithms.

“We’re a data-centric company across all of our businesses,” Ropell says. “It’s certainly going to be helpful, but we try not to be slavishly devoted to data. We’re not trying to reverse-engineer great films. Creativity and quality can’t necessarily be measured by data.”