Lights, Camera, Amazon?

Attention, screenwriters and filmmakers. Amazon.com (Nasdaq: AMZN  ) wants to be your new best friend.

The e-tailer yesterday unveiled Amazon Studios, a new venture for procuring commercially viable film and script ideas through open competitions. As much as $2.7 million in prize money is on the line, the company said in a press release.

Welcome to Amazon's wheel ... of ... fortune!
Competitions will be held monthly with submissions judged by a panel of experts and Hollywood insiders. Filmmakers enter by submitting test films of more than 70 minutes in length. Screenwriters enter by submitting completed scripts. Each month's top film earns the creator $100,000. Winning screenwriters receive $20,000.

Amazon Studios also plans a $1 million bonus for the best film, and a $100,000 kicker for the best script received before the end of 2011. Expect these boons to be awarded to moneymaking theatrical projects. (What's the point otherwise?)

How much Amazon.com stands to gain is unclear, but writers and directors shouldn't expect riches from working with the e-tailer. Projects made and released as a theatrical film net the creator a $200,000 kicker. Projects that take in more than $60 million in domestic box office receipts get an additional $400,000. If there are multimillion-dollar payouts to be had, Amazon Studios will get them.

Suffering Amazon's kingdom of content
We've seen this model before. In May, Yahoo! (Nasdaq: YHOO  ) spent $100 million for articles aggregator Associated Content. A similar aggregator called Demand Studios has filed an S-1 and could complete an IPO before the end of the year.

Amazon Studios differs from these aggregators in seeking quality over quantity. And that makes sense. I've yet to see an Amazon Studios contract, but I'd bet it includes not only exclusive streaming rights, but also exclusive retail rights to books, merchandise, apparel, toys, and other gear related to the films it produces.

Hollywood will also get its share. Amazon Studios is partnering with Time Warner's (NYSE: TWX  ) Warner Bros., which gets first right of refusal to distribute its films.

Netflix (Nasdaq: NFLX  ) and Apple (Nasdaq: AAPL  ) must hate this plan. It forces them to either pay a rival to broadcast content, or miss out on revenue from distributing a winning film. In an era where content is becoming king, the latter isn't acceptable.

Well played, Amazon. Now show us how you'll make money from this venture.

What's your take? Do you think Amazon Studios is a winning idea? Please vote in the poll below and then leave a comment to explain your thinking.

Interested in more info on Amazon.com? Add it to your watchlist.

Apple, Amazon.com, and Netflix are Motley Fool Stock Advisor selections. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He had stock and options positions in Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Apple and is also on Twitter as @TheMotleyFool. Its disclosure policy is off to get more coffee.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1372213, ~/Articles/ArticleHandler.aspx, 10/31/2014 10:28:20 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement