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Amazon Studios Faces a ‘Late Night’ Disaster, Bob Berney’s Exit, and Bidding-War Realities

These are troubled times for Amazon Studios and its leader, Jennifer Salke, but the struggles do not belong to them alone.

Amazon Studios’ Julie Rappaport, Jennifer Salke, Ted Hope and Scott Foundas at Sundance 2019.

Anne Thompson

This week, Amazon Studios became a standard-bearer for the issue impacting every specialized distributor: Exactly how is it supposed to get people to watch their movies?

Exhibit A is the failure of “Late Night,” for which Amazon paid $13 million in North American rights. With 2,200 screens in its second week, the well-reviewed “Late Night” saw a per-screen average of $2,367, and will likely end its run at or near $20 million.

Exhibit B is the exit of Bob Berney, head of Amazon Studios’ marketing and distribution. He decided that when his four-year contract expired on June 15, it was the right time to leave. “I fulfilled my deal and we did some great stuff,” he told IndieWire. “I am proud of the team. I want to move on. I’ve done everything I think I can do there.”

Already, Salke is making moves to right the ship. Although Amazon launched declaring its intent to honor traditional theatrical windows, she’s been public in questioning the streamer’s commitment to full-on theatrical film distribution. At this point, that hardly seems like a radical stance: A recent Variety report places the marketing spend for “Late Night” at $33 million. That would place costs at $46 million, and with Amazon collecting perhaps 50% of box-office receipts, the total loss will be massive by any measure.

Amazon must be praying that the fates are kinder to another Sundance acquisition, “Brittany Runs a Marathon,” which goes wide August 23; it spent $14 million on worldwide rights. However, that film also faces a cruel calculus of the current marketplace: The hottest Sundance movies appear to have the best chance of high returns; hot movies mean bidding wars, which mean high prices. Turning a profit at those prices demands a wide release, which in turn demands a minimum of $20 million in P&A costs — often more, and those costs are contractual. In 2019, it is difficult to envision the scenario where those deals can make financial sense.

Television veteran Salke, who is confidently leading Amazon’s TV team, clearly faces a learning curve on the film side. Jason Ropell, VP and worldwide head of motion pictures for Amazon Studios and Prime Video, left shortly after Salke joined the company and wasn’t replaced. She leans on her film division co-heads — production executives Ted Hope and Julie Rappaport, and MBA grad and six-year Amazon vet Matt Newman — at a time when finding audiences for two-hour films is a challenge for the most experienced industry players.

Amazon Studios Co Head of Movies Matt Newman, Amazon Studios Co Head of Movies Julie Rapaport, Emma Thompson, Amazon Studios Head Jennifer Salke, Mindy Kaling and Amazon Studios Head of Marketing and Distribution Bob BerneyAmazon Studios Presentation and Screening of 'Late Night', CinemaCon, Las Vegas, USA - 03 Apr 2019

Amazon Studios co-head of movies Matt Newman, Amazon Studios co-head of movies Julie Rapaport, Emma Thompson, Amazon Studios head Jennifer Salke, Mindy Kaling, and Amazon Studios head of marketing and distribution Bob Berney, CinemaCon 2019

Todd Williamson/January Images/Shutterstock

Hollywood’s tectonic plates are shifting. Disney+ poached Netflix acquisitions executive Matt Brodlie; Erik Feig’s new production company Picturestart scooped up its new COO, James McGough, from Netflix, where he oversaw the Content Strategy and Analysis team for the Original Film division. Warner Media named BBC Americas’ Ann Sarnoff as Warner Bros.’ new chairwoman CEO. Even Sundance director John Cooper announced that he would be stepping aside to become Emeritus Director after the 2020 festival.

There are still ways to thread the needle in this treacherous market. Theatrical indie A24 has managed (with the Guggenheim production fund behind it) to produce strong titles that pop in the marketplace (“Hereditary,” “Eighth Grade”), as well as youth-oriented films that are easier to market digitally at lower cost. And they’ve sold movies that don’t make theatrical sense, like “Native Son,” to new partner HBO. These days, competing to acquire movies against deep-pocketed competitors like Netflix is too expensive, and production is the only answer.

However, sometimes that doesn’t work, either. Last year, Amazon co-financed the $18 million Mike Leigh period reconstruction “Peterloo,” which earned just $152,000 in North America. Other 2018 films that Amazon financed included Richard Linklater’s “Last Flag Flying” ($965,000 worldwide), Felix van Groeningen’s “Beautiful Boy” ($16.5 million worldwide), and Luca Guadagnino’s “Suspiria” ($7.9 million worldwide).

“Peterloo”

Amazon

Of course, measures of success at Amazon are different. All titles are viewed with an eye toward Amazon Prime, and their ability to lure new users to the service. However, it’s unclear whether Amazon’s long-term interests continue to lie with funding $5 million-$20 million movies.

Salke is already being flexible in creating release plans for her slate: Some will go straight to streaming, some will respect theatrical windows, and some will not. Already Steven Soderbergh-produced fall release “The Report”will shorten its exclusive theatrical window to two weeks, Netflix style. Both Silicon Valley companies are accustomed to experimenting and reading the numbers. After Ted Sarandos insisted that Netflix would never release a movie ahead of streaming, Netflix followed Amazon’s lead into theatrical distribution for Oscar-bound titles like “Roma,” while Amazon is heading in Netflix’s direction with “The Report.” And even Apple plans to head into Oscar territory with its film slate.

But Salke needs to figure out where Amazon Studios is going with its film production and release strategy. She has stated that she wants to lean into movies targeted at women, and genres like thrillers. But Berney’s departure leaves her with one less knowledgeable expert on hand.

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