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 The largest U.S. online retailer, which has spent heavily on
original programming and boosted the marketing for its shows, is
up for two Golden Globe Awards this Sunday. Its Amazon Studios
division, launched in 2010 with skepticism, is now starting to
enjoy critical acclaim.
The plan is raising its profile in Hollywood and, critically,
among would-be members of its $99-a-year Prime program, which
comes with two-day shipping on items sold on Amazon, streaming
video and other perks.
Also, like big studios in Hollywood, Amazon has courted big-name
screenwriters and producers, such as Jill Soloway, a writer and
co-executive producer on HBO's "Six Feet Under." She also is the
creator of "Transparent", the Golden Globe television series
nominee starring Jeffrey Tambor as a divorced parent who comes
out as transgender to his three adult children.
Amazon Studios, born as a rebel, promised to use its data-mining
skills to birth mini-screen blockbusters, eschewing the longheld
practices of Hollywood creative types.
But its shows struggled to find an audience early on. Few
consumers knew the largest U.S. online retailer, best known for
low prices and fast shipping, was in the TV business unlike
Netflix, which promoted its shows like "House of Cards" heavily.
Since then, Amazon's marketing budget for original shows has
expanded. In the fourth quarter, Amazon began promoting two of
its original shows - "Transparent" and "Mozart in the Jungle" -
with television ads and billboards, the more traditional
marketing tools that it previously skipped.
The changes do not amount to a wholesale shift in strategy for a
company that relies heavily on mining customer data to inform
its development team of potential television hits or misses. But
they illustrate how Amazon is refining its approach to original
scripted content, which is increasingly important to attracting
new members to its Prime membership program.
“We have gotten better over time about being quick and
responsive and big and having the campaign roll-out effectively
around the world in the UK, U.S. and Germany, where Prime
exists,” said Roy Price, head of Amazon Studios.
While the marketing campaigns are far from the full-page media
spreads used by Netflix and Time Warner's HBO to promote shows,
it has bought attention to Amazon’s fledgling foray into
original content production, which is shown free to Prime
members.
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USING NEW, OLD HOLLYWOOD MODELS
Amazon Studios started by focusing on building a software system
where people could submit and share scripts, which are reviewed by
Amazon readers and story analysts. But after the technology was in
place, Amazon began to court professional writers, producers and
directors to work on original content, Price said, allowing Amazon
to tap new and old models.
"As a practical matter, setting up the open system required some
engineering and building, so we did that first. So once we launched
that, we sort of set up the professional aspect as well," Price
said.
The vast majority of Amazon's television pilots now come from
experienced and well-known names in the industry.
The Golden Globe Awards nominations for “Transparent” for best TV
comedy along with a best actor nod for Tambor are signs that the
model is paying off. Another new Amazon show, “Mozart in the
Jungle”, has also garnered strong reviews, landing on the New York
Times’ list of Best Shows of 2014.
Amazon 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. Amazon spent more than $100 million
developing original video content in the third quarter.
As Amazon spends more on marketing, investors are concerned about
its lack of profitability and skimpy disclosures regarding that
spending. Analysts say it is unclear whether and when its efforts in
original video content will bear fruit.
Amazon is hoping the investments will help draw and retain paying
subscribers to its Prime program. Prime members spend three times
more on Amazon.com than other consumers, and they also spend more on
Amazon over time, according to International Strategy and Investment
Group analyst Greg Melich.
Garry Trudeau, the creator and executive producer of “Alpha House”
and Pulitzer Prize-winning cartoonist known for his Doonesbury comic
strip, said that Amazon was betting on the long term, financially.
"As a commercial paradigm, it's obviously another world. Our
prospects aren't linked to overnight ratings. As with everything
else, Amazon takes the long view with programming," he said.
(Reporting By Deepa Seetharaman; Editing by Bernard Orr)
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