Amazon will produce original films as another sweetener for Prime

January 19, 2015 11:02 AM

(Bloomberg) -- Inc. will begin making feature- length movies for theaters, pushing further into Hollywood’s territory after winning its first major television awards last week.

The e-commerce giant, No. 1 in the Internet Retailer 2014 Top 500, will start production this year and offer the films on its Amazon Prime Instant Video online streaming service four to eight weeks after showing them in theaters, the Seattle-based company said in a statement on Monday.

Netflix Inc., which competes with Amazon Prime, announced its own foray into movies in September with a plan to produce a sequel to “Crouching Tiger, Hidden Dragon.” Film producer Ted Hope, who worked on the original “Crouching Tiger,” will lead creative development at Amazon Original Movies, according to the statement.

Amazon, which started its TV production studio in 2010, on Jan. 11 won the Golden Globe award for best comedy series for “Transparent,” a show about a Los Angeles family who discovers their father is transgender. The company also said last week it had hired Woody Allen to write and direct a new half-hour TV series.

Original TV series and movies boost the appeal of Amazon Prime, which keeps millions of consumers coming back to Amazon to shop as they are assured of free, two-day shipping. They also get free access to the shows and films available on Prime Instant Video. Some 40 million U.S. households are part of the $99-a-year program, according to a recent estimate by financial research firm Sanford C. Bernstein Ltd. 

Amazon has made 31.6 million items eligible for Prime shipping, up 24% from the fourth quarter of 2013, according to an estimate released today by Colin Sebastian, a longtime Amazon observer and e-commerce analyst who works for investment firm Robert W. Baird and Co. Those eligible items represent 13% of all physical items—including   25% of media products and 8% of non-media products.




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