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With Amazon (NASDAQ: AMZN ) stock trading near all-time highs over $280 per share, you can't help wondering what's driving it. After all, the company has a variety of interests including its core retail website, cloud computing services, and high-margin electronic goods sales through its low-margin Kindle tablet devices.
Lately, however, I've spent some time highlighting the fact that Amazon seems dead set on fostering the ideas and thoughts of its users to take advantage of the growing e-book and streaming video markets.
It's a fan's world
For instance, Amazon recently unveiled "Kindle Worlds", a commercial publishing platform to enable writers to earn up to 35% royalties by creating fan-fiction based on a variety of original works and characters. While Amazon has only secured the rights to Gossip Girl, Pretty Little Liars, and Vampire Diaries, that's still a great start considering those properties come built in with millions of fans already. Better yet, writers can keep their eyes peeled for fresh opportunities after Amazon promised more titles will arrive soon.
Then, last week Amazon announced announced that it will soon develop five original television pilot episodes into full-fledged series. Naturally, Amazon once again put the reins in fans' hands as the series were chosen based on the votes of viewers from among 14 possible pilots. The five shows, for their part, came from the more than 15,000 movie scripts and 3,600 series pilot scripts submitted to Amazon Studios since its launch in November 2010.
For the storyteller in you ...
On Friday, the folks at Amazon Studios unveiled another tool for scriptwriters, dubbed Amazon Storyteller.
Storyteller, for its part, is a slick little tool that can take a script from rich text format and translate it into a storyboard. Through storyboards, writers can help audiences visually capture the essence of a film by either telling the full story or by offering it in short form, almost like a trailer. In Amazon's words, "Either approach can be a great way to build an audience for your story and see how people respond to it."
... there's money to be made
Of course, remember that the massive number of scripts I mentioned guarantees there will be competition, but there's little reason to wonder why; if your TV script gets chosen for Amazon's Development slate, Amazon will pay you a cool $10,000. What's more, you also stand to earn paid directing opportunities, and, if your series gets chosen for production, they'll pay you an extra $55,000 plus up to 5% of net merchandising receipts from toy and T-shirt licensing.
For movies, writers can also earn the same $10,000 if their script gets chosen for the Development Slate, along with paid writing and directing opportunities and a $200,000 bonus if the script gets made into a feature film. Better yet, if the feature film makes more than $60 million at the box office, Amazon will pay you another $400,000.
That's some serious money, but remember it pales in comparison with the cost of securing licenses to stream content from the biggest names in entertainment. Remember, while Netflix's (NASDAQ: NFLX ) recent deal with Disney is sure to win it plenty of new subscribers, it was estimated to have cost around $300 million per year. Also keep in mind that Netflix has an undoubtedly expensive deal in place with DreamWorks Animation, which will not only allows it to stream future Dreamworks' movies, but also will result in at least one original animated series on Netflix later this summer.
Perhaps that's part of the reason Netflix recently let its license with Viacom lapse, even though it meant losing popular kids' shows such as Dora the Explorer, SpongeBob, Rugrats, and Jimmy Neutron. Even Amazon, though, couldn't resist some of the big names; Amazon stock fell after the company inked its own multiyear deal with Viacom just a few days ago in its efforts to level the playing field.
Foolish final thoughts
Even though Amazon's Viacom deal may have cost more than some investors would have liked, I still love what Amazon's doing to bring its users -- the little guys -- into the mix. Time will tell how successful Amazon's latest original content will be, but remember this is still just one of Amazon's many long-term oriented segments. What's more, remember that Amazon is also using this to make its Prime subscription service that much sticker.
Still, with so many people submitting thousands upon thousands of scripts, you could almost say Amazon is generating its own lottery tickets with each new script. In the end, even just one or two breakout hits from Amazon's user-driven content system could make it all worthwhile and result in massive profits for owners of Amazon stock.
In the end, that's just one more reason I'm convinced Amazon stock remains a solid long-term buy.
Everyone knows Amazon is the king of the retail world right now, but at its sky-high valuation, most investors are worried it's the company's share price that will get knocked down instead of its competitors'. The Motley Fool's premium report will tell you what's driving the company's growth, and fill you in on reasons to buy and reasons to sell Amazon. The report also has you covered with a full year of free analyst updates to keep you informed as the company's story changes, so click here now to read more.