Will Amazon.com, Inc.’s (NASDAQ:AMZN) $100,000 Bonus for Filmmakers Rattle Netflix (NASDAQ:NFLX)?

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In a move that could take competition for digital video content a notch higher, Amazon.com, Inc. (NASDAQ:AMZN) has drawn a plan to woo independent filmmakers looking for distribution deals.
 
The company is making a financial offer to indie producers who didn’t succeed to sell or sign distribution contracts for their movies at the Sundance film festival to publish on its Amazon Video Direct platform (AVD).
 
AVD has been fashioned as a self-publishing interface through which filmmakers can earn royalties on their movies. Publishers on AVD have several options to decide how they would like to offer their content on the platform. Movies on AVD can be offered for purchase, rental or free with ads. Producers can also choose to offer their movies on Amazon Prime.

Enhanced royalties

For films that featured at this year’s Sundance festival but didn’t succeed to win buyers or distributors, Amazon is offering an attractive package. Owners of those films can get a bonus of $100,000 from Amazon to make the films available on AVD platform. Additionally, Amazon is offering enhanced royalties of $0.30 per hour of viewing in the U.S. and $0.12 per hour of viewing internationally. That’s double AVD’s standard royalties of $0.15 for US viewing and $0.06 for international viewing.
 
Producers interested in Amazon’s deal have until February 28 to upload their movies on AVD.

Amazon’s move escalates video content war

Amazon’s AVD program and the recent move to woo Sundance film reveals a calculated step to push ahead of Netflix, Inc. (NASDAQ:NFLX) in the battle for video content. Amazon and Netflix are investing billions of dollars to acquire video content, including original movies and shows, as part of the efforts to make their streaming video services more appealing.
 
While Netflix primarily makes money from charging a monthly subscription fee for access to its content, Amazon offers video streaming as an add-on feature to its Prime membership program that costs $100 a year or $11 a month.
 
Amazon stock is up more than 40% over the last 12 months, but the stock eased 0.8% to $823.48 in the last session.

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