Behind Amazon’s Sudden Change in Its Film Strategy

LOS ANGELES — “The Aeronauts,” an adventure film about swashbuckling 19th-century hot-air balloonists, was built for the big screen. Led by an Oscar winner, Eddie Redmayne, and a “Star Wars” star, Felicity Jones, it has real cinematic sweep, with sequences that take place miles above sea level. In May, Amazon Studios announced that the movie would play exclusively on IMAX screens for a one-week engagement before “a full theatrical run.”

“We look forward to giving our customers an unforgettable theatrical experience high above the clouds,” Jennifer Salke, the head of Amazon Studios, said in a statement at the time.

Two months later, Amazon scrapped the IMAX engagement and shrank the theatrical release. Under the new plan, “The Aeronauts” would have a two-week run in a small number of theaters before becoming available for streaming on Amazon Prime Video, which is available to more than 100 million Amazon Prime subscribers.

The film’s director, Tom Harper, was disappointed by the move. “It’s not how it’s intended to be seen,” he said in an interview with The New York Times last month at the Toronto International Film Festival, where “The Aeronauts” received a standing ovation. “But it’s a changing world, and I want people to see the movie. If it were up to me, I’d tell them to see it in the theaters.”

The about-face also stunned the movie industry, partly because Amazon had been a friend to old Hollywood, more willing than the other tech giants to sign on for lengthy theatrical releases. Films from Amazon that spent months in theaters have included the two-time Oscar winner “Manchester by the Sea,” the acclaimed 2017 comedy “The Big Sick” and this summer’s “Late Night.”

With the change in plan for “The Aeronauts,” Amazon was behaving more like its streaming rival Netflix, which has favored delivering movies to its subscribers quickly, rather than giving the films long theatrical runs. And the abruptness of the shift contributed to questions that have been swirling among entertainment industry people about how the company’s entertainment unit, Amazon Studios, handles films.

The Amazon Studios television arm has distinguished itself with two Emmy-winning series, “Fleabag” and “The Marvelous Mrs. Maisel.” Under Ms. Salke, a former president of entertainment at NBC who took charge in 2018, it has also struck TV deals with name writer-producer-directors like Jordan Peele and Barry Jenkins, as well as the “Fleabag” creator Phoebe Waller-Bridge. The awards and prominent production deals have overshadowed Amazon’s film division to some degree.

“On the film side, I still think they are figuring out what they want to be,” said Richard Greenfield, a co-founder of the LightShed Partners research firm.

Ms. Salke, 55, did not inherit a cinematic gold mine when she replaced Roy Price, who was ousted after an allegation of sexual harassment. Before she stepped in, the film division had been on a losing streak, with box-office flops from A-list directors like Richard Linklater and Todd Haynes.

In January, Ms. Salke attended the Sundance Film Festival for the first time as the Amazon Studios head — and the company went on a spree, shelling out significant sums for several films, including $14 million for “Brittany Runs a Marathon,” a low-key, feel-good comedy now in theaters; another $14 million for “The Report,” a government cover-up drama starring Annette Bening and Adam Driver that will have a limited release in November; and $13 million for the domestic rights to “Late Night,” a comedy written by Mindy Kaling and starring Ms. Kaling as a neophyte TV writer and Emma Thompson in the role of an imperious talk show host.

With “Late Night,” Amazon hoped to repeat its success with “The Big Sick,” a Sundance pickup that grossed more than $56 million at the box office. At the height of its run, “Late Night” played on 2,200 screens across the country this summer.

Despite largely positive reviews and a $32 million marketing budget, audiences stayed away, and “Late Night” generated $15.4 million in domestic box office. The trade press pounced. IndieWire called the release “a disaster.” Variety said Amazon had been “thrown off-balance.”

Ms. Salke called the coverage “frustrating.” She also defended the “Late Night” acquisition, saying it has been streamed on Amazon Prime Video more than any other Amazon original film since it appeared on the service Sept. 6. She would not reveal specific figures.

When “Late Night” was still in theaters, Amazon parted ways with the company’s head of film marketing and distribution, Bob Berney, a Hollywood veteran whose four-year contract had expired. At roughly the same time, Amazon also changed course on “The Aeronauts,” a film with a budget of roughly $40 million that it had developed in house.

Along with her three co-heads of motion pictures — Ted Hope, Matt Newman and Julie Rapaport — Ms. Salke called the makers of “The Aeronauts” and told them that, instead of the exclusive IMAX engagement and extensive theatrical release in the United States, the film would open Dec. 6 at a limited number of theaters and start streaming Dec. 20. (Entertainment One, known as eOne, will distribute the film in Britain for a full theatrical run, including IMAX theaters.)

“With the accessibility of a movie like ‘The Aeronauts,’ we think we can make a bigger event out of it on Prime,” Ms. Salke said.

The decision to favor small-screen viewing was made at a time when theatrical distribution has become less of a sure thing. Moviegoers seem reluctant to go to theaters for films that do not belong to larger franchises or have a superhero or two in them, and box office revenue for the summer was down 2 percent from a year earlier.

“Given the state of the business, nobody is relishing the idea of having a movie out in theaters that, no matter what, the industry wants to talk about the underperformance of those movies,” Ms. Salke said.

But Amazon decided on the cinematic route for “Brittany Runs a Marathon,” which opened in five theaters in August and has played on more than 1,000 screens. So far, it has generated a modest $6.6 million, according to the website Box Office Mojo. Amazon has decided on a similar strategy for “Honey Boy,” which stars Shia LaBeouf and has received strong early reviews, with a plan to open it in a few theaters Nov. 8 before rolling it out across the country.

The differing strategies for “The Aeronauts” and the two smaller films go against conventional Hollywood wisdom, which holds that a spectacle like “The Aeronauts” should have a shot at big-screen success, while more intimate films are often suited for the direct-to-consumer approach.

Todd Black, an independent producer who has two films set up at Amazon, including a movie written by Aaron Sorkin about Lucille Ball, said he was rooting for Ms. Salke and her film team.

“They are learning and being more definitive about what they can and can’t do, will and won’t do,” he said. “But I feel like they need some help and they need a mission statement.”

Ms. Salke sounded confident in her vision: “My mission is clear. The details of it are in progress.”

And what is the mission?

“The mission is to align the movie side to the same values of trying to get premium content to the global consumer,” she said. “That’s what pays the bills. I will have streaming movies that I will deliver at a regular cadence to my customers globally.”

Starting in 2020, she added, those movies — as many as 30 a year — will come from three categories: young adult films, including a lesbian romance from the director Jennifer Kent; dark-themed thrillers from Blumhouse Productions, the company behind “Paranormal Activity” and “Get Out”; and films Ms. Salke once described as “sexy date-night movies,” now called provocative dramas, from collaborators like Nicole Kidman and her Blossom Films production house.

“I’m fully confident in the strategy,” Ms. Salke said. “I know what a global marketing campaign can do with a television series. I know what those numbers are.”

Ms. Salke has yet to replace Mr. Berney, who before joining Amazon ran the marketing campaigns for “Pan’s Labyrinth” and “The Passion of the Christ.” There seems to be little urgency at the company to find a new marketing and distribution executive.

Three people familiar with Amazon said the company had become something of an also-ran among those looking to change jobs in Hollywood. For one thing, the flip-flop on the release of “The Aeronauts” suggests a muddled vision for the film division’s future.

Of less concern but still an issue is the lack of perks the famously frugal company offers. For example, Amazon refuses to pay for first-class air travel, and although the stock options are generous, the people added, the salaries are on the low side. Even the parking lot in Culver City is a problem. Those who do not arrive early are often stuck parking at the nearby Trader Joe’s.

Mr. Black, the independent producer, said the film community should be patient. “They know they made some mistakes and everyone has them under a microscope,” he said. “No one should lose sight that they have a huge checkbook.”