Why Amazon beating Netflix to an Oscar best picture nomination matters

Amazon has played more by Hollywood rules—releasing a movie in theatres before putting it up online—rather than a simultaneous release, as Netflix often does

Amazon acquired ‘Manchester by the Sea’ for $10 million a year ago at the Sundance Film Festival. The film has secured six Oscar nominations in all. Photo: AP
Amazon acquired ‘Manchester by the Sea’ for $10 million a year ago at the Sundance Film Festival. The film has secured six Oscar nominations in all. Photo: AP

Los Angeles: Amazon.com’s strategy of sticking to Hollywood’s time-honoured traditions helped deliver a big pay-off that has so far eluded its streaming rival Netflix—the first-ever best picture nomination for an online video service.

Manchester by the Sea, a family tragedy set in Massachusetts, was nominated Tuesday for best picture by the Academy of Motion Picture Arts and Sciences, one of nine movies that will vie for the top honour. The film secured six Oscar nominations in all, including ones for acting, writing and directing.

While Netflix Inc., the streaming leader with almost 94 million subscribers worldwide, has upended entertainment industry traditions, Amazon.com Inc. has played more by Hollywood’s rules. In the movie business, that means giving motion pictures a serious run in theaters, rather than releasing them simultaneously online, as Netflix often does.

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“They would both like Oscar glory, all the studios do,” said Jeff Bock, senior box office analyst at Exhibitor Relations Co., an industry researcher.

When Amazon buys a movie, Bock said, it comes with the vow the film will have a long run in theaters before showing up on the company’s video service, a concession to directors and others who make their movies with big screens in mind. That means at least a month, the company has said.

“That isn’t the case with Netflix right now,” Bock said.

Sundance Festival

Seattle-based Amazon acquired Manchester by the Sea for $10 million a year ago at the Sundance Film Festival in Park City, Utah. The film stars Casey Affleck as a janitor who returns to his hometown to look after his nephew following the death of his brother. But he struggles to cope with his own tragedy. Michelle Williams and Lucas Hedges are nominated for their supporting roles, while Kenneth Lonergan was nominated for his directing and writing. Roadside Attractions distributed the movie in US theaters.

The world’s largest online retailer, Amazon uses movies and TV shows to attract and keep customers. Its Prime members, who pay $99 a year for delivery discounts and media streaming, are more likely to stick around on the site and spend more than those who don’t subscribe. Video watchers are also more inclined to renew their prime memberships.

In April, Amazon introduced a stand-alone Prime Video service featuring on-demand access to thousands of movies and Amazon originals for $8.99 a month. In all, Prime had about 65 million members in the US at the end of September, up 38% from a year earlier, according to Consumer Intelligence Research Partners in Chicago, which surveys Amazon shoppers.

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Amazon’s embrace by the movie industry stands in contrast to its years of feuding with book publishers and authors, who maintained the company’s low prices have undermined their industry. Most recently, that’s been with electronic books priced far below printed material.

Industry leader

Netflix is the world’s largest paid video service. The streaming pioneer, theLos Gatos, California-based company spent $6 billion on TV shows and movies last year, and has won both Emmys and Academy Awards, including Oscars for best documentary. Amazon spent $3 billion, according to estimates from Cowen & Co.

Netflix also just registered its best quarter ever. The company added 7 million subscribers in the final three months of 2016 and 19 million for the year.

Moreover, one Hollywood agent who sells films says the two services are picking movies that target different audiences, with Amazon aiming for shoppers who want more artistic fare. Amazon’s promise of a theatrical run attracts makes the service more appealing to some of those filmmakers.

“They’ve been a great partner to the exhibition industry,” said Ken Thewes, chief marketing officer at Regal Entertainment Group, the No. 2 US theater chain. “They absolutely have a different approach than Netflix. They have really respected the windows and we respect that.”

Oscar screenings

Regal has teamed up with Amazon on a $35 movie pass to show all the best picture nominees at theaters ahead of the 26 February Academy Awards ceremony. At last year’s annual exhibitor convention, CinemaCon, Amazon presented its upcoming slate just like a major Hollywood studio. In one year, the company released 15 films, as many as Paramount Pictures.

Netflix wants to change the old model—and show movies online to customers at the same time they’re in theaters. With a growing global subscriber base, the company has financed a lot of films it says are popular that never had a shot at awards (or good reviews), like comedies starring Adam Sandler and Kevin James.

Rich Greenfield, an analyst at BTIG Llc, said it’s too soon to say whether one or the other has come out on top in feature films. Both companies have been spending on feature films at this year’s Sundance festival, and Netflix has invested large sums in new movie projects including Brad Pitt’s War Machine” and a Will Smith picture called Bright.

“Let’s see what happens when Netflix rolls out some of its far larger films bets later this year into next,” Greenfield said. “It’s still early.” Bloomberg

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