Amazon.com

(Amazon.com)

Amazon to Produce Movies for Theaters, Prime Video Service

Features Reuters

Amazon.com Inc (AMZN) is getting into the movie business, building on some early successes in TV productions, the latest sign of the Internet retailer's eagerness to build itself into a major Hollywood player.

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Amazon said on Monday it was aiming to produce close to 12 movies a year for theatrical release which would then be available on its Prime video service within two months, a huge drop from the roughly one-year wait it normally faces to stream Hollywood releases.

Amazon expects to focus on "indie" movies with budgets of between $5 million and $25 million, spokeswoman Sally Fouts said. While that's modest compared with Hollywood blockbusters, it will add further to spending at Amazon, potentially unnerving investors concerned about the company's lack of profitability and skimpy disclosure of its spending.

The move shows Amazon's growing ambitions in digital media, coming just days after the online retailer signed director Woody Allen to create a TV series and one of its existing series won a Golden Globe Award, a first for Internet TV services.

Unlike rival Netflix Inc, a standalone Internet TV service, Amazon's Prime video service comes bundled with the Internet retailer's two-day delivery for items purchased on the site, which costs $99 a year, a key driver of revenue for the company.

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It remains unclear whether Amazon believes the movie business can make money on its own, but most of its other ventures are ultimately aimed at bolstering its underlying retail business.

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The move into movie production ups the ante against Netflix, which said in September it would jointly produce a sequel to "Crouching Tiger, Hidden Dragon" and in October signed a deal for comedian Adam Sandler to star in and produce four films to be shown exclusively on the service.

Amazon said it has hired Ted Hope, a producer of independent movies including "Crouching Tiger, Hidden Dragon" and Academy Award-nominated "Eat Drink Man Woman," to spearhead the effort.

"Our goal is to create close to twelve movies a year with production starting later this year," Roy Price, vice president of Amazon Studios, said.

If successful, the venture could further threaten traditional big-screen movie theaters, which have been coping with dwindling audiences. Sony Pictures' recent success in releasing its comedy "The Interview" through video on demand services after threats from hackers was also seen as a blow to their business.

While Hope is known for making independent movies rather than big-budget Hollywood blockbusters, Amazon Studios has succeeded in the world of television in part by aligning itself with directors like Allen and Steven Soderbergh of "Ocean's Eleven" fame.

The company spent an estimated $2 billion on content in 2014 with about $200 million of that used to develop original shows, according to Wedbush Securities analysts. Such projects include "Mozart in the Jungle" and the multi-Golden Globe Award-winning "Transparent."

Amazon founder Jeff Bezos is known for his hunger to tackle new markets but the company has had a mixed track record in some ventures, including the recent Amazon Fire phone, whose price tag it has slashed after weak sales.

(Reporting By Shubhankar Chakravorty and Sneha Banerjee in Bengaluru, and Christian Plumb in New York; Editing by Joyjeet Das and Nick Zieminski)