Amazon’s Hollywood Shopping Cart Secrets

“Can I show you my Pinterest board?” offers Roy Price, holding out his iPhone. “This is how we develop shows on Amazon.”

The head of Amazon Studios, the man Jeff Bezos has entrusted to turn the country’s largest Internet retailer into an over-the-top content provider to rival Netflix and Hulu, is sitting in an Asian-inspired restaurant in Santa Monica sharing vintage photographs of Palm Springs. “I have notions for the show, but I don’t write anything down,” Price says with a laugh as he scrolls through pictures of Robert Evans and Ali MacGraw in the California desert 50 years ago. “Writing stuff down is the old way. Get a hundred pictures that really capture it and put them on Pinterest and you don’t have to pitch — you can just show people.”

In other words, there’s a pretty good chance a Palm Springs period piece will be streaming on Amazon sometime soon. “It’s fully groovy,” Price says of the era as he digs into his eggplant and tofu dish. He and Ted Hope, the independent film veteran who joined Amazon in January to head the company’s ambitious push into original movies, have invited THR to lunch for their first extensive interview together.

Obviously, not all of Price’s content is developed on his smartphone, but the creative process at Amazon Studios, along with everything else about the company, is a little different. It’s one of the reasons Hollywood has eyed the streaming service with a bit of skepticism, even as it’s won critical buzz (and two Golden Globes) for the dramedy Transparent and is writing the kind of top-of-the-market checks that lure such creators as Ridley Scott and Woody Allen. Transparent, starring Jeffrey Tambor as a transgender woman coming out to her children and ex-wife, is certain to snag Emmy nominations July 16 ahead of its season-two debut later this year. Of course, it’s hard to know how many people actually are watching the shows via Amazon’s Prime Instant Video, since, like Netflix, Amazon never releases viewership numbers. But there’s no question that the company is making noise and being taken seriously.

Now, though, as Amazon.com celebrates 20 years in business, Price has a new mandate and an even larger challenge: Bring Amazon to the big screen. Hope, 52, has his work cut out for him. Amazon wants to acquire or produce 12 features a year, with budgets ranging from $5 million to $25 million, to be released theatrically and then, within a month or two, made available exclusively to Prime members (customers who pay $99 a year, mostly for free shipping on books, baby wipes, laundry detergent and other merchandise). The first of Amazon’s films — Spike Lee‘s Chicago-set Lysistrata update, Chi-Raq — will have an awards-qualifying run in December, insiders say, to qualify for the 2015 Oscar race. “We’re looking to make visionary work by visionary directors,” says Hope, whose producing credits include The Brothers McMullen and The Ice Storm. Nods Price, “I would say The Imitation Game, Birdman and The Grand Budapest Hotel are all totally in the zone,” he adds. “Prestige titles, the kind of movie that isn’t for the teenaged audience.”

To put it another way, the kind of movie most likely to draw customers who will stick around after the film to buy socks and cat food — which is the whole reason Amazon got into the content business in the first place. “It’s a way to drive people to spend more on the rest of their shopping cart,” says BTIG media analyst Rich Greenfield. “It’s all about keeping you in their ecosystem.”

Bezos himself explains the strategy with the clarity of a man who has made billions over the Internet (even if his company, with $89 billion in annual revenue and a market cap hovering around $200 billion, lost $214 million in 2014). “You can have the best technology, you can have the best business model, but if the storytelling isn’t amazing, it won’t matter,” he tells THR in an interview. “Nobody will watch. And then you won’t sell more shoes.”

Price, 47, may dress like a Seattle web head — his usual uniform is dark jeans and a leather jacket, though during lunch he’s trying out a more offbeat look (white slacks and a brown patterned shirt) — but he’s a child of Hollywood. His father was Frank Price, who ran Universal Pictures in the 1980s, and his grandfather was Roy Huggins, co-creator of The Rockford Files. He grew up in Beverly Hills and spent his early career at Disney, developing animated TV series, then knocked around for a while as a consultant until, in 2004, he moved his wife and three kids to Seattle to join Amazon’s on-demand division. He moved departments in 2009 to spearhead the launch of Amazon Studios.

Unlike Netflix, which jumped head-first (and pocketbook-first) into originals with the $100 million House of Cards, Amazon Studios spent its first few years figuring out its originals strategy while operating as a crowdsourcing script service, soliciting screenplays from mostly unproduced writers. But in 2012, Price began building the studio’s development team — hiring Joe Lewis to run comedy and Tara Sorensen to make children’s shows — and commissioned Amazon’s first slate of 14 TV pilots. His big (and many thought nutty) idea was to release them online and let the public weigh in on which should be allowed to blossom into full series. But the first batch made few waves, yielding just two comedies, including Betas, a Silicon Valley series that lasted only 11 episodes.

As far as Hollywood was concerned, Amazon was the studio equivalent of community college. “It was my last choice,” recalls Jill Soloway, the Six Feet Under writer who sold Amazon the Transparent pilot in 2013. She remembers asking her agent why she’d want to pitch a TV show to the place “where I buy my paper towels.” Two years later, the Transparent creator, who recently signed an overall deal with Amazon said to be worth $4 million a year, has changed her tune. “They don’t want anything anybody else has,” she gushes. “They want stuff that really f—s up the status quo.”

Naturally, there are skeptics. While Netflix’s Ted Sarandos is seen as the quintessential numbers man, Hollywood looks at Price as a flashier, less consistent executive. He knows his pop culture, peppering his conversations with obscure literary references: “Did you ever read Scruples? It’s the best novel ever.” But he has trouble articulating his creative strategy for his studio. Pressed on what sorts of projects he’s looking for to round out his slate, he pauses: “I can’t get specific because then it would be like a formula, and we don’t have that.” He later concedes he would like to launch a genre series.

Price, who moved back to Los Angeles last year, has a Seattle style of doing business. In a town where sucking up is considered good manners, Amazon barely makes an effort, at most serving bagels to visiting talent during pitches. And with its small development team (Amazon won’t disclose just how small), the outfit — which once operated out of a shared office with IMDb above a juice bar at the Sherman Oaks Galleria — runs more like a scrappy upstart than the well-funded content arm of a multibillion technology behemoth. There are no true offices, even for Price, so all meetings are taken in brightly colored conference rooms. Executives prefer to email rather than call — “I really only take like three phone calls a day,” the head of the studio boasts. “Roy gets things done and they pay the bills,” says WME partner and co-head of the agency’s TV department Ari Greenburg. “He’s a little quirky; he has a personality. As the big studios and networks get more and more corporate, it’s fun working with somebody who has his taste and persona.”

But there have been a couple high-profile kerfuffles. Chris Carter, creator of The X-Files, saw his sci-fi series The After canceled by Amazon just before it went into production (sources say there were creative differences). In May, Woody Allen caused a stir at the Cannes Film Festival when he said he “regretted every second since I said OK” to directing and writing a TV series for Amazon (although he made clear he thought the executives were “nice people and I don’t want to disappoint them”). Lewis raised some eyebrows at the Globes in January when he was spotted taking a photo of the audience while onstage at the Beverly Hilton, something the head of comedy at Netflix or HBO probably wouldn’t do.

All of it taken together has given the studio a reputation for being a band of outsiders, unwilling to abide by the traditions and codes that have ruled the entertainment industry for decades. “They didn’t come here to conform to Hollywood,” says Carlton Cuse, who admires Amazon even though his Civil War pilot, Point of Honor, was passed over after last January’s viewer voting. “They came here and brought their own culture. They believe strongly that they can use their culture and methodology to be successful in the television business in the same way they’ve been successful in other businesses.”

Amazon founder and CEO Jeff Bezos

Maybe they can. Top talent, after all, will follow the money and the audience, no matter what kind of snacks are served at meetings. And Amazon is growing. Bezos insists subscribers to Prime have jumped 53 percent in the past year (he declines to provide more specific numbers). In January, an independent analysis by Consumer Intelligence Research Partners estimated that there were about 40 million Prime subscribers, slightly more than Netflix’s 38 million U.S. subs, although not all Prime members stream video. A report this spring from Nielsen calculated that about 13 percent of U.S. households do stream content from Prime Instant Video, double Hulu’s numbers but still far behind Netflix’s 36 percent.

Amazon also has a ton of cash, and it isn’t shy about spending it. The studio typically budgets its TV series at $2 million to $4 million an episode, but has been known to go much higher (the pilot for Scott’s dystopian drama The Man in the High Castle, which was picked up in January and impressed the geeks at Comic-Con, cost closer to $12 million, according to sources). And it’s attracting big-name talent as a result. Among the next batch of TV pilots coming to Amazon, there’s a Lynda Obst-produced drama set at Newsweek in the 1970s and a David E. Kelley legal drama, The Trial, that would have been given a series order if Kevin Costner signed on for the lead, but he didn’t, despite Amazon offering the star what sources say was $500,000 an episode.

While talent agents love the big upfront commitments Amazon is making and the hands-off oversight, they worry that the company, like Netflix, hasn’t fully defined its business model, which could prevent a series from being sold into syndication, where the real money is made. “The upside is they are spending big money and they encourage creative freedom. Their content is truly a reflection of the creator’s vision,” says ICM Partners founding partner Chris Silbermann, who praises Price for putting Amazon on the map in Hollywood. “The only question is, ‘What is the true value of the backend?’ In a world where history repeats itself, these were the questions we were asking at the early days of HBO and Showtime, and those turned out pretty well.”

Making TV shows is one thing; making movies is another. As Amazon expands, it will face hostile forces it’s never had to deal with before. For instance, theater owners aren’t thrilled with Amazon’s plan to put new releases online after only a month or two in theaters (traditional releases take nine to 12 months to make it to the small screen). It’s also not a popular idea with filmmakers, who generally prefer longer theatrical legs, especially for the sort of specialty films Amazon is talking about making. (Imitation Game, for instance, played in cinemas for five months as it expanded nationally. It might not have had a chance to build — and make it to the Oscars — if it had been yanked out of theaters after only eight weeks.)

Price and Hope emphasize that unlike Netflix, which is planning concurrent digital and theatrical releases, every Amazon movie will play in cinemas first. “We are 100 percent committed to theatrical and are confident we’ll have films playing in 500 to 1,000 theaters,” Hope says. “We’ll find a way to make it work.” They won’t discuss their upcoming slate, but sources say the Spike Lee project will be joined by Elvis & Nixon, a historical drama about the relationship between Richard Nixon (Kevin Spacey) and Elvis Presley (Michael Shannon); a Jim Jarmusch movie; and Terry Gilliam‘s The Man Who Killed Don Quixote (about an ad exec transported back in time). The studio might end up picking up the domestic rights to Eleanor Coppola‘s Bonjour Anne, a romance starring Diane Lane and Nicolas Cage. The slate reflects Hope’s taste and suggests Amazon won’t follow Netflix’s lead and make $80 million Adam Sandler movies, instead targeting the art house (and, not coincidentally, the book-buying) crowd.

Does Amazon know what it’s doing? Probably as much as anyone in Hollywood, and unlike many, it is willing to experiment and take chances. “We need Amazon to succeed,” says Greenburg. “The television business functions best when you have competition. If we only have one SVOD player, we have a problem.”

As Price polishes off his lunch, he’s had another idea about Palm Springs in the 1960s. “It doesn’t have to stay in Palm Springs,” he says. “Sometimes they could come to Beverly Hills. It could be some kind of family soap. Think Dallas, fully updated.” He pauses for a second and changes his mind. “No, don’t think Dallas. I didn’t say that.”

Pamela McClintock contributed to this report.