Amazon is entering the film production business, Retuers reports, offering $2.7 million for scripts and films and entering into a first-look deal with Warner Bros.

The new Amazon Studios, in partnership Time Warner Inc.’s Warner Bros., is offering cash for scripts and test movies submitted through its new web portal. Top projects will be developed into commercial feature films, and full-length movie submissions will be tested for feedback. Warner Bros. will have the first right to develop and produce the projects, but Amazon can approach other studios should Warner Bros. pass.

“Movies have been developed pretty much the same way since talkies were considered cutting-edge. But here at Amazon Studios, we believe 21st-century technology creates opportunities to make and share movies and scripts more easily than ever,” says the Amazon Studios website.

Organized around monthly and annual awards for Best Movie and Best Script, Amazon Studios is essentially a giant online contest that encourages creative collaboration similar to what other studios are doing like Current TV’s Creation Studios. “Your work will be shared with a global community of filmmakers and fans, who can offer revisions and advice. Screenwriters can see their words come to life as full-length test movies made by directors vying for our $100,000 monthly awards.” And of course, dangling an opportunity to get projects to a real “Hollywood Partner” and a “meeting with Warner Bros. development executives” will help jumpstart involvement.

But should your project make it to the silver screen, you might not end up a winner after all. The Development Agreement states that by submitting, you grant Amazon a “worldwide, royalty-free, non-terminable, sub-licensable, transferable right to copy, transfer, stream, sell, rent, make available for download and otherwise exploit and distribute” your project and any of its derivatives. And if they actually develop your project into a movie, you’ll have agreed to the following payment schedule:

  • $0 for the initial 18 month option period to develop the project into a full length movie
  • $10,000 to extend the option another 18 months
  • $200,000 to purchase the property
  • $400,000 bonus if it grosses over $60 million at the box office
  • $100,000 one-time fee if they start production on a spin-off or sequel
  • $5,000 one-time fee per episode (when first aired) of a TV series derived from the property’s video-on-demand service has faced intense competition from Netflix and iTunes. According to Reuters, Netflix struck an exclusive deal worth $1 billion to distribute online new movies from Paramount, MGM, and Lions Gate; it’s no wonder Amazon is after original content on the cheap. With Amazon’s 2008 acquisition of indie film network Without A Box (through its subsidiary IMDb), Amazon Studios can now tap into a pipeline of new original properties. And since Amazon is not a signatory to any agreement with a collective bargaining organization, Warner Bros. and other studios may have found a way around guild jurisdiction, making Amazon Studios a tantalizing new source for projects.

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