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Amazon and Netflix Are Spending Big at Sundance, and They Are Winning

January 26, 2016, 4:32 PM UTC
attends the Day One Press Conference at the Egyptian Theatre during the 2014 Sundance Film Festival on January 16, 2014 in Park City, Utah.
Sundance Film Festival founder Robert Redford in Park City, Utah, in 2014.
Photograph by George Pimentel — Getty Images

At last year’s Sundance Festival, which often sets the tone for the coming year of movies, Amazon and Netflix came with deep pockets and a desire to land some big fish, but both left empty-handed. This year, however, they are striking some major dealsa sign that film-makers are increasingly willing to look outside of the traditional studio and movie-theater distribution system.

Perhaps the biggest fish went to Amazon (AMZN), which paid $10 million for the rights to “Manchester By The Sea,” a new film from Kenneth Longergan that stars Casey Affleck and has been getting some rave reviews for its portrait of a man struggling to raise his nephew after his brother dies.

The 11-day festival in Utah is only half over, and already Amazon has bought four films and Netflix (NFLX) has acquired three, whereas most traditional movie distributors have not bought anything. In fact, Amazon bought two Sundance films before they even opened at the festival, and Netflix bought one.

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When both Amazon and Netflix were shut out of the bidding last year, there were a number of theories about why, including the fact that film-makers might be uncomfortable with the idea of not getting a wide theatrical release.

Since both companies are focused on their streaming services, they typically distribute their movies through a small number of theaters for a short time and then put them online. In some cases, they put them online at the same time as they appear in theaters, if they can get the theater chains to agree to such a deal.

This can pose a problem because many traditional film-makers are still caught up in the idea of having their movies shown to vast numbers of theater-goers, and seeing the box-office grosses reported in Variety magazine, and so on. There is also a lingering impression that a movie going straight to online distribution has somehow failed.

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In addition, having someone like Amazon buy the rights to a film can make it harder to find a studio partner that will distribute it in theaters, since many studios rely on the streaming revenue to offset their costs.

So what has changed this year? In part, it could be the money that both Amazon and Netflix have to throw aroundAmazon outbid everyone else with $10 million for “Manchester By The Sea,” for example. But it could also be that growing numbers of movie-makers just want to have their films watched by as many people as possible, and they don’t necessarily care where or how they watch it.

“You always want your film to be shown on a big screen with perfect sound and the best projection,” writer/director Sian Heder told the New York Times, after selling the rights to a film to Netflix for about $5 million on Saturday. “But that’s not always the reality anymore. The way that people consume media is changing.”