Exclusive: Amazon Studios to cut back on indie films in programing shift: sources

[January 18, 2018]   By Jeffrey Dastin and Jessica Toonkel

SAN FRANCISCO/NEW YORK (Reuters) - Amazon.com Inc., which has made waves in recent years buying art-house movies at the Sundance Film Festival, is heading to the prestigious event this week with a long-term change in the works: It plans to shift resources from independent films to more commercial projects, people familiar with the matter told Reuters.

The move reflects a new phase in the online retailer's entertainment strategy. Initially, Amazon worked on high-brow movies that would win awards, put it on the map in Hollywood and help it attract top talent.

Now, Amazon wants programming aimed at a far wider audience as it pursues its central business goal: persuading more people to join its video streaming service and shopping club Prime.

The change in the movie strategy parallels a similar shift in Amazon Studios' TV operation, which is also moving to bigger-budget fare.

Amazon expects to go after films with budgets in the $50 million range at the expense of indie projects costing around $5 million, one person familiar with the plans said on the condition of anonymity. Another person confirmed the overall strategy, adding that the Culver City, California, studio is still working out the details on how much of its film budget will go to these bigger releases.

Amazon declined to comment.

The course change comes after Roy Price, who led Amazon Studios from its inception in 2010 and was a champion of projects with awards potential, resigned in October. Albert Cheng, the studio's chief operating officer, has stepped in as interim head and is in charge of television projects, while Vice President Jason Ropell runs the film division. Both report to Jeff Blackburn, a Seattle-based senior vice president who wields broad authority at the company.

It is unclear who will permanently replace Price.

On the film side, Amazon is not moving all the way into blockbuster territory. The TV group had offered $250 million just for the rights to a fantasy prequel series of "The Lord of the Rings," according to people familiar with the matter. That is a far more expensive project, representing a bigger change in direction than what the movie division is considering, one source said.

Nor is Amazon abandoning indie films entirely. But industry sources are unsure how active the company will be at Sundance this year. The festival's lineup is not believed to have a standout like "Manchester by the Sea," which Amazon bought at Sundance for $10 million and which went on to win two Oscars. Amazon and rival Netflix Inc <NFLX.O> in general have pushed up prices for such prestige fare.

Jeff Bezos, Amazon's chief executive, recently told at least one industry executive that it is business as usual at the movie studio, a person familiar with the matter said. At Sundance, that could mean multi-million-dollar deals for films destined for theaters, as well as small deals by a separate team - Amazon Video Direct - that offers more modest payments for a project's online streaming rights.

Still, several filmmakers were surprised recently when the studio turned away a handful of projects with budgets up to $6 million, which they believed fit the mold of Amazon's 2017 hit "The Big Sick," another person familiar with the matter said.

It was not immediately clear if their rejection was due to Amazon's new priorities.

(Reporting by Jeffrey Dastin in San Francisco and Jessica Toonkel in New York; Additional reporting by Lisa Richwine and Piya Sinha Roy in Los Angeles; Editing by Jonathan Weber and Leslie Adler)

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