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Amazon's Latest Offering: Hollywood's Inside Track

The retailer wants to help make movies by offering research from its IMDb Pro service to industry players.

June 04, 2004|Chris Gaither | Times Staff Writer

Amazon.com Inc. made its name in books. Now, it's following the well-trod path to Hollywood.

Movies have been part of the retailer's business for years, of course. It sells them online, and for five years it has owned the Internet Movie Database, a popular website for film and television fans who rush to www.IMDb.com to settle bets on obscure actors.

Amazon recently expanded IMDb's offerings as part of an effort to reduce dependence on the razor-thin margins of online retailing. And with the new subscription service IMDb Pro, aimed at entertainment-industry insiders, Amazon hopes to not just sell movies but also help Hollywood make them by connecting agents, producers and talent using the same sort of data analysis that helps Amazon sell stuff.

Few who watch Amazon are counting on a blockbuster.

"It's a sleeper part of the company that, to most eyes, is going to continue sleeping," said Mark Mahaney, an analyst with American Technology Research in Greenwich, Conn.

Amazon is an unlikely Tinseltown player, if geography is any guide. About half its employees work at Amazon headquarters in Seattle, while the others are spread across Europe. As for Col Needham, the movie buff who launched the IMDb website and sold it to Amazon, he runs the business as its managing director from his home in Bristol, England.

In any event, there are no plans to open a Los Angeles office. (Technology industry executives said Amazon executives have told them they would never have offices in California because they then would have to charge sales tax to customers who live in the state.)

Amazon won't say much about IMDb. Needham said 18 million people visit the free site each month. But he and other company executives declined to say how many visitors then click over to Amazon and buy movies, how many subscribers the IMDb Pro service has accumulated since it launched in January 2002, or even whether the subsidiary is making a profit.

But analysts generally agree that it's worth Amazon's effort to assemble niche businesses like IMDb.

Martin Pyykkonen, an analyst at investment bank Janco Partners, pointed to Amazon's A9 subsidiary, which is building a search engine that it may license to other companies, and last week's announcement that Bombay Co., a Fort Worth-based home furnishings store, had hired Amazon to build and operate its e-commerce sites.

"Anything that could help their gross margins would be key," Pyykkonen said.

In 2003, Amazon's first profitable year, the firm earned $35.3 million on sales of $5.3 billion.

IMDb became part of Amazon with a much simpler mission: to help sell movies. It began as a pet project of a cinephile.

In 1990, Needham was writing software for Hewlett-Packard Co. When not working, he watched movies. Lots of them. More than 1,100 that year alone.

"I began to see so many movies that I was losing track of which ones I'd seen and which ones I hadn't seen," he said.

So he created a database of movies with main cast members. He began sharing the database with other movie buffs over the Internet and adding more information that he compiled and others contributed.

In February 1996, the hobby turned into a business. IMDb sold its first banner ad for $25,000 to Digital Equipment Corp., which was testing software that predicted which movies people would like based on what they had seen -- similar to what Amazon does now.

Needham was invited to meet with Amazon's founder and chief executive, Jeff Bezos, in London in early 1998. Bezos was gearing up to launch a movie store, expanding Amazon's offerings from just books. He wanted to use IMDb's catalog of cast listings, trivia and other detailed information to make shopping more interesting for Amazon customers.

Amazon said it made the acquisition "to support its eventual entry into online video sales." The announcement was buried in a news release about two other European acquisitions -- of Bookpages and Telebook Inc. -- that marked the company's expansion overseas. The price of IMDb wasn't disclosed.

Analysts said the IMDb acquisition served its initial purpose: The site has fed Amazon's movie store with cast lists, memorable quotes and other tidbits, and that detailed information on the movies it sells gave Amazon an edge over other shopping sites. "That was the end of the focus on it," said Steve Weinstein, a senior research analyst at Pacific Crest Securities.

In addition to selling ads and licensing its content to other companies such as Showtime Networks, IMDb is selling subscriptions to IMDb Pro, a $12.95 monthly or $99.95 annual service. It gives users access to much deeper information than IMDb.com. Subscribers can look up representation for actors, directors and writers; how much money their previous films grossed; and how far along in production movies are.

Proprietary systems called StarMeter and MovieMeter predict which actors and movies are on the rise by, among other things, analyzing how often users of the free IMDb site are searching for them.

Barry C. Collin, president of the Hollywood-based Assn. of Independent Feature Film Producers, used to call his friends to dig up dirt on potential partners in a project. Due diligence could take months.

Now he looks them up on IMDb Pro. A filmmaker recently asked Collin to help bankroll a new script. Collin liked the writing. But when he looked up the director, he said, he discovered that the box-office receipts for each of the director's previous projects "wouldn't have filled my car's gas tank." Collin passed.

The service has reduced his time researching and reading scripts, though he'll let the online retailer go only so far in making up his mind on film projects.

"It's not like books, where they can make recommendations for me," he said of Amazon. "I've been doing this for 20 years. It's part quantitative, part qualitative, part gut and part praying. Amazon is the quantitative part."

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