Amazon Studios has relied on traditional film distribution practices to foster greater collaboration with the gatekeepers in Hollywood.
However, after playing second fiddle to Netflix for the better part of a decade, Amazon is changing its theatrical releasing strategy.
How Amazon Releases Domestically
When Amazon Studios entered the film market, they followed a traditional independent approach to theatrical distribution. In North America, the company partnered with Roadside Attractions and Lionsgate to handle releasing and marketing. However, after years of deterioration at Lionsgate, Amazon is now exploring domestic self-distribution.
Amazon observed the industry-standard three-month theatrical window supported by exhibitors. This method proved wildly successful for its lone best picture nomination, Manchester By The Sea. The original production only had a budget of $10 million but hauled in nearly $80 million in global box office receipts, over 60% from domestic exhibition.
A perfect example of Amazon’s acquisition model is revealed in the company’s most successful pickup to date, The Big Sick, which was a market pickup rather than internally produced and financed film.
During the 2017 Sundance Film Festival, Amazon signed several territories for the film. Beyond the US, Amazon Studios acquired rights in the UK, Germany, Spain, and Japan, among others. Amazon then licensed all-rights to Studiocanal in the UK, Weltkino in Germany, Inopia in Spain, and Gaga in Japan. In each case, Amazon then licensed back the streaming rights and continued working closely with the distributors on marketing and releasing.
This distribution strategy cultivated industry allies for Amazon instead of enemies, which was a departure from Netflix’s disruptive approach. However, Amazon seems to be transitioning to a limited release model similar to Netflix.
Two of Amazon’s top films this year will only be released in theaters for two weeks before moving to Amazon Prime in time for the Thanksgiving holidays. These films include The Report, which Amazon acquired for $14 million at Sundance this year and its original production The Aeronauts, an $80-million film shot in IMAX, which was initially set for a much wider release.
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Amazon Steps Back
Amazon Studios has a mountain of films in development and production, but many remain in flux as the company considers changing its releasing model. During this transition period, Amazon has been far less aggressive in acquiring films at markets compared to prior years.
However, during TIFF 2019, Amazon Studios did acquire a few titles including, the Oscar submission from Brazil and Un Certain Regard winner, The Invisible Life of Eurídice Gusmão, Blow the Man Down, a seaside crime mystery, an alien tale The Vast of Night, and The Sound of Metal, a drama about a drummer who starts to lose his hearing.
Sundance has proved the riskiest market for domestic pickups lately. Films released this summer that were acquired at Sundance six months prior have been financially unsuccessful. One of the biggest disappointments from Sundance was Late Night, which Amazon acquired for $13 million, but only managed $16 million in gross domestic receipts. Another bomb for Amazon was Brittany Runs a Marathon, which was acquired for $14 million, but only grossed $7 million.
After a string of expensive Sundance acquisitions that failed at the box office, Amazon Studios wants to focus on fostering relationships with emerging filmmakers. Sources at Amazon indicate that the company’s move away from completed independent films is part of a long-term strategy.
Jennifer Salke, the head of Amazon Studios, contends that Amazon is still preparing to release 30 films a year. However, after nearly two years of driving the once esteemed film division off the cliff, her days are likely numbered.
How Amazon Releases Abroad
In matters of theatrical releasing, Amazon has been more than willing to leave marketing and advertising to the expertise of local distributors. This model allowed Amazon to build bridges with all-rights distributors and content creators without disrupting traditional distribution practices.
For the nearly dozen films produced and financed by Amazon Studios each year, they would license all the rights, including theatrical, VOD, SVOD, premium, and terrestrial television to international distributors outright. Then they would license back the streaming rights for Amazon Prime using standard box-office-based rate cards.
This model created an enormous incentive for the distributor to maximize box office receipts so they would receive more substantial licensing fees from Amazon. After the film completed its initial exploitation in theaters and television on-demand, Amazon is then rewarded by the distributor’s diligence in releasing and marketing the film as widely as possible.
NATO Holds Steady
Netflix failed to convince any of the three major stateside exhibitors, AMC, Regal, and Cinemark, to accept a 45-day window for Martin Scorsese’s The Irishman, which marks the company’s latest attempt to release a film wide in theaters. Netflix’s $200 million mafia film will now only get a limited theatrical release on independent screens starting on November 1st before streaming on November 27th.
The exclusive 90-day theatrical window has become a line in the sand that exhibitors in North America are unwilling to cross. It’s becoming clear in hindsight that Amazon missed a golden opportunity to follow through in their stated theatrical ambitions with the purchase of Landmark Theaters last year.
After years of declining interest in Made-For-TV movies, producers and distributors at the 2019 American Film Market (AFM) are packaging these films for Netflix and several other streamers.
The renewed appetite for lower-budgeted feature films at Amazon, Netflix, and several new streaming services is fueling enormous opportunities for independent film producers and content creators.
Producers that can deliver within tight budgetary constraints while utilizing sophisticated tracking tools to develop content for specific segments of the streaming population will be in high demand.