By JP Mangalindan, writer
FORTUNE -- Can Amazon do to Hollywood what it has done to the publishing and retailing industries? Two years ago Jeff Bezos & Co. launched Amazon Studios, which aims to compete with traditional production companies by developing feature-length films and television series -- with a distinctly Amazonian twist: Scripts and pitches are uploaded online, and may be evaluated and commented on by the public.
Roy Price, director of Amazon Studios and a former Disney (DIS) executive, believes Amazon's crowd-sourcing approach is a much more efficient way to make films and shows than the way media companies do it today (invest big dollars in A-list screenwriters, directors, and stars, and hope all that talent produces blockbusters). "By and large, your $80 million is out the door," he says of his rivals' approach. "You're certainly not going to be able to unmake the movie and go make a different movie that people want to see."
Of course, Amazon Studios has yet to prove that its more democratic approach to filmmaking can work. It currently has 22 movies and 12 TV series in the early stages of review and development, though none have reached the point of being filmed. Several members of the Hollywood community have embraced the idea. Hellraiser creator Clive Barker was tapped by the studio to rewrite the script for an action-horror flick called Zombies vs. Gladiators. Several studio execs and writers have signed on to help assess the commercial viability of projects.
Amazon (AMZN) isn't the only tech company pursuing the small screen. Netflix (NFLX) is creating original shows for its Watch Instantly streaming service, and Microsoft (MSFT) reportedly is looking to develop shows for delivery on its Xbox gaming platform. Amazon's endgame is broader. While its TV shows are meant to be delivered via Amazon's online video service, which competes with Hulu and Netflix, Amazon aims to have its movies distributed in traditional movie theaters, thus capturing a sliver of Hollywood's profits.
Media moguls aren't exactly quaking in their boots. One studio executive called Amazon Studios "cute" and questioned the wisdom of the upstart's crowd-sourcing model. But the movie industry shouldn't ignore Amazon's fledgling effort, as retailers like Borders and Circuit City initially did. Talk about a script with an unhappy ending.
Amazon vs. Hollywood
How Amazon Studios compares to the development process for the movie Easy A
Two years ago, Jeff Bezos & Co. set out to make feature-length films and change the way they get made. While only a small group of people will eye a traditional script before it reaches the theater, literally anyone who visits Amazon Studios' web site can evaluate and comment on a project. To illustrate just how different the process can be, here's how it stacks up against the production of the 2010 teen comedy, Easy A, starring Emma Stone.
A shorter version of this story appeared in the December 3, 2012 issue of Fortune.
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